POWER rates in the Manila Electric Co. (Meralco) service area are expected to rise in May with the typical household expected to pay an additional P37 on its monthly bill, the first to not include the refunds for over-recoveries in transmission and other charges, Meralco said.
Meralco said in a statement Friday that the overall power rate for May is P8.5920 per kilowatt-hour (kWh), against P8.4067 per kWh in April.
The May rate is also lower than the year-earlier level of P8.7468 per kWh.
The typical household is defined as one that consumes 200 kWh.
It added that households consuming 300 kWh, 400 kWh, and 500 kWh will see their bills increase by P55, P73, and P90, respectively.
According to the distribution utility, the increase was due to the completion of the refund of over-recoveries in pass-through charges ordered by the Energy Regulatory Commission (ERC).
The ERC released an order on Dec. 29 directing Meralco to refund P1.4 billion worth of over-recoveries in transmission and other charges.
“Meralco implemented the ERC-approved adjustments starting January 2021 and completed the refund of over-recoveries in April. The impact on residential customers, from the months of January to April 2021, was a refund of around P0.15 per kWh,” the power distributor said.
Meralco said the generation charge for May also increased to P4.5474 per kWh from P4.5370 per kWh in the previous month.
This is due to the P0.2541 per kWh increase in the agreed power rates as a result of low dispatch levels from the San Gabriel combined cycle natural gas-fired plant in Batangas, operated by First Gen Corp., which committed the plant’s full capacity for six years starting 2018.
Wholesale Electricity Spot Market (WESM) charges also stayed high due to tight supply on the Luzon grid.
“However, these were offset by lower charges from the Independent Power Producers which decreased by P0.1921 per kWh,” Meralco said.
“Power supply agreements provided 52% of Meralco’s energy requirement while WESM share was down to 7% this month. Independent power producers share this month was 41%,” it added.
Meralco said the transmission charge for residential customers also rose by P0.0933 per kWh as a result of higher ancillary service charges and with the end of the refunds, while a net increase of P0.0816 per kWh was recorded from taxes and other charges.
“Meanwhile, collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC,” Meralco said.
However, Meralco said the increase in May power rates was mitigated by the ongoing P13.89 billion refund ordered by the ERC, based on the actual weighted average tariffs compared to the interim average rate for distribution-related charges from July 2015 to November 2020.
In February, the ERC directed Meralco to refund that amount, which is equivalent to P0.1528 per kWh, over 24 months or until the total is fully given back to customers.
Last month, a consortium made up of Meralco Power Gen, a subsidiary of Meralco; Aboitiz Power Corp.; and Taiwan Cogeneration International Corp., said it will not be pursuing the development of a planned 600-megawatt (MW) coal-fired plant in Subic, Zambales. The consortium is known as Redondo Peninsula (RP) Energy Inc.
Asked to comment, Meralco Head of Utility Economics Lawrence S. Fernandez said the cancellation of the RP Energy project will not affect the power supply.
“As I see it, there is no direct impact on Meralco’s supply portfolio. We don’t have a power supply agreement with Redondo,” he said during a virtual Friday briefing on the company’s power rates.
Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave