SLIGHT INCREASE IN SEPTEMBER 2021 RATES DUE TO HIGHER GENERATION CHARGE
The Manila Electric Company (MERALCO) announced on September 10, 2021 that there will be a slight increase in electricity rates this month, as the overall rate for a typical household inched up by P0.1055 per kWh to P9.1091 per kWh from last month’s P9.0036 per kWh due to higher generation charge. This is equivalent to an increase of around P21 in the total bill of a typical residential customer consuming 200 kWh.
Despite the slight adjustment, this month’s rate is still lower than the P10.0732 per kWh registered in the same month in 2018. It also marks an 11-percent decrease from the P10.2647 rate registered in the same month a decade ago.
Distribution True-Up Refund Mitigates Increase
The continued implementation of the Distribution Rate True-Up refund which began in March 2021 mitigated higher rates.
The refund rate for residential customers is at P0.2761 per kWh and appears in customers’ bills as a line item called “Dist True-Up.”
It can be recalled that the ERC provisionally approved MERALCO’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. This amount represented the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020.
Higher Generation Charge due to WESM’s NSS Correction and Increased PSA, IPP Costs
Generation charge, which makes up about 55 percent of customers’ electricity bills, increased by P0.1117 per kWh to P5.0439 from last month’s P4.9322.
Charges from the Power Supply Agreements (PSA) registered an increase of P0.2494 per kWh. The reduction in demand brought about by the re-imposition of enhanced community quarantine in Metro Manila and neighboring regions led to lower excess energy deliveries, which are priced at a discount, from South Premiere Power, San Miguel Energy, and AC Energy. Despite the increase, PSAs remained Meralco’s lowest cost source of supply.
Independent Power Producers (IPP) charges also increased by P0.0955 per kWh due to lower average plant dispatch with the forced outage of Quezon Power (460 MW) from August 18 to 22 and scheduled outage of San Lorenzo Module 50 (265 MW) starting August 16. Fuel costs of Sta. Rita and San Lorenzo, which is around 60% of their total cost, also increased due to the use of more expensive alternative liquid fuel for their continued operation, following the ongoing restriction of gas supply from Malampaya. The cost of using liquid fuel is about twice that of using Malampaya gas.
Meanwhile, lower demand in the Luzon grid also offset the impact of higher plant outages during the August supply month. As a result, Wholesale Electricity Spot Market (WESM) charges registered a reduction of P0.7504 per kWh. However, charges from the WESM would have further decreased by P0.5646 per kWh without the correction on the Net Settlement Surplus (NSS) component in the July 2021 WESM bill, and the generation charge adjustment would have been only at P0.0553 per kWh.
For August supply, IPP, PSA, and WESM provided 36.8%, 53.2%, and 10.0% of MERALCO’s energy requirements, respectively.
Transmission Charges Down due to Lower Ancillary Service Charges
Transmission charge for residential customers is lower by P0.0520 per kWh to P0.6803 from the P0.7323 registered in August, due to a decrease in Ancillary Service charges.
Other Charges Post Increase; Distribution Charge Unchanged
Subsidies, taxes, and other charges inched up by P0.0458 per kWh during the month.
Meanwhile, collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.
Meralco distribution, supply, and metering charges, meanwhile, have remained unchanged for 74 months, after recording reductions in July 2015.
Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges, as payments go to the power suppliers and the system operator, respectively. Taxes, universal charges, and the FIT-All are remitted to the government.
No Disconnection in MECQ Areas
Following the Government’s announcement which placed the NCR, Bulacan, Cavite, Lucena City in Quezon and Rizal under Modified Enhanced Community Quarantine (MECQ), Meralco earlier announced that disconnection activities will remain suspended in the said areas until September 15 for NCR, and until the end of the month for Bulacan, Cavite, Rizal, and Lucena in Quezon.
“Given the most recent announcement of the Government placing NCR, Cavite, Rizal, and Laguna under MECQ, all disconnection activities in the said areas will also be suspended to help ease the burden of our customers with the needed relief and additional time to settle their bills,” said Ferdinand O. Geluz, Meralco FVP and Chief Commercial Officer.
Meralco Promotes Energy Efficiency
Meralco continues to encourage customers to practice safety tips and energy efficiency.
These include ensuring that circuit breakers are turned off amid flooding, remaining dry at all times before touching any electrical facility, unplugging appliances, removing mud and dirt from service equipment while wearing rubber gloves and rubber-soled shoes, ensuring all electrical wires and devices are dry, and having wiring systems checked by a licensed electrician.
Meanwhile, customers can save energy consumption with several tips such as cleaning aircon filters every two weeks, making sure that the proper aircon capacity is utilized, preventing refrigerators’ air vents from getting blocked, unplugging appliances when not in use, using a power strip to make it more convenient in turning off appliances and maximizing natural light during daytime.