Manila Electric Company (Meralco) customers will pay slightly higher for their power consumption in August due to the increase in the transmission charge for residential customers resulting from higher grid operator charges for ancillary service, which covers reserves necessary to maintain grid reliability.
Meralco customers will pay an additional P0.0327 per kWh in the electricity rate this August, bringing the overall rate for a typical household to P11.6339 per kWh from the previous month's P11.6012 per kWh. For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P7 in their total electricity bill.
"Driving this month's overall rate adjustment is the P0.1086 per kWh increase in the transmission charge for residential customers," Meralco said in a statement, "For this month, ancillary service charges went up by more than 50% as charges for contingency and dispatchable reserves doubled."
The transmission charge increase more than offset the P0.0503 per kWh reduction in the generation charge.
Charges from independent power producers (IPPs) were lower by P0.2974 per kWh due to higher IPP dispatch and Peso appreciation, which affected around 97% of dollar-denominated IPP costs. These could also offset more than the Malampaya natural gas price increase following its quarterly repricing.
Meanwhile, prices in the Wholesale Electricity Spot Market (WESM) also reduced as Luzon's average peak demand decreased by 690 MW. The secondary price cap was triggered only 2.3% of the time during the July supply month from the previous 6.6%. However, the effective WESM charges for the month showed an increase of P0.5940 per kWh after adding the third of four installments of deferred May WESM costs ordered by the Energy Regulatory Commission (ERC).
On the other hand, charges from power supply agreements (PSAs) went up by P0.0421 per kWh, mainly due to higher fuel-related costs.
IPPs, WESM, and PSAs accounted for 33%, 27%, and 40% of Meralco's total energy requirement for the period.
Early on, Meralco advised customers of a possible increase in First Gas - Sta generation costs. Rita and San Lorenzo use Malampaya gas.
With the expiration of the old Gas Sale and Purchase Agreement (GSPA) in July, the supply of Malampaya natural gas to San Lorenzo is now governed by the new GSPA between First Gas and the Malampaya Consortium, similar to Sta. Rita. However, the pricing formula under the old GSPA for both plants continues to be applied pending regulatory approval of the new GSPA.
"Once the new GSPAs are approved, Sta's generation charges will be affected. Rita and San Lorenzo," Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said.
Other charges
The Universal Charge for Missionary Electrification registered a reduction of P0.0433 per kWh following the completion of the recovery of the ERC-approved true-up rate.
Taxes and other charges, meanwhile, registered a P0.0177 per kWh net increase.
Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively. In contrast, taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are all remitted to the government.
Meralco's distribution charge, on the other hand, has stayed the same since the P0.0360 per kWh reduction for a typical residential customer in August 2022.
Improving distribution network resiliency
To further enhance the resiliency of its distribution network against severe weather disturbances, Meralco continues to maintain and upgrade its electrical facilities across its franchise area.
Aside from the routine maintenance works, Meralco crews have proactively assessed electrical facilities for upgrading to improve the delivery of electricity service to customers. Given the increased likelihood of flooding this rainy season, Meralco also reminds customers to continue observing electrical safety. Some tips include turning off the main electrical power switch or circuit breaker in case of flooding and ensuring that hands are dry when touching electrical appliances and facilities.
Customers can report power outages and other concerns through Meralco's official social media accounts on Facebook (www.facebook.com/meralco) and X formerly Twitter (@meralco). They may also text their concerns to 0920-9716211 or 0917-5516211 or contact the Meralco Hotline at 16211 and 8631-1111.
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