Electricity rate slightly increases this October

MANILA, PHILIPPINES, 9TH October 2017 – Meralco announced an increase for October 2017, amounting to PhP0.0345 per kWh for a typical residential household, thereby bringing the overall rate from last month’s PhP9.2491 per kWh to PhP9.2836 per kWh.  The slight rate increase this month amounts to a PhP6.91 increase in the total bill of a typical residential household consuming 200kWh.

The October rate increase is mainly due to the P0.1777 per kWh increase in generation charge, which was offset by the reduction in other charges.

Higher generation charges lead to overall rate increase

Overall generation charge increased this October by PhP0.1777 per kWh, from PhP4.5378 per kWh in September to PhP4.7155 per kWh this month primarily due to the completion of the 2014-2016 Meralco-petitioned refund in the previous month, which lowered the September generation charge rate compared to the October generation charge.

On September 7, 2017, Meralco filed a Manifestation with the ERC informing the Commission of the necessary process of reconciliation, which resulted from the implementation of the refund through a fixed rate.  The reconciliation was reflected last month as a reduction of P0.1136 per kWh in the overall generation charge.  Reconciliation for other components, which includes transmission and system loss charges, subsidies and corresponding taxes, reflected a net collection of P0.1257 per kWh.

Cost of power from Power Supply Agreements (PSAs) and Independent Power Producers (IPPs) registered slight increases due to higher fuel prices and lower average plant dispatch, respectively.  The shares of PSAs and IPPs to Meralco’s total requirements stood at 43% and 45%, respectively.

Charges from the Wholesale Electricity Spot Market (WESM), meanwhile, decreased by PhP0.4382 per kWh, as lower power demand during the September supply month mitigated the impact of four (4) Yellow Alert declarations by NGCP. The share of WESM purchases to Meralco’s total requirements this month was 12%.

This month’s generation charge also includes the Power Sector Assets and Liabilities Management Corporation’s (PSALM) net recovery of certain incremental costs incurred by the National Power Corporation.  In a Decision and an Order, both dated June 20, 2017, the ERC approved the collection of approximately P21.5 billion from customers of affected distribution utilities over sixty (60) months.  For customers in the Meralco service area, this is equivalent to a net add-on of around 1.2 centavos per kWh in the Generation Charge, to be remitted to PSALM.

Reduction in other charges tempered further increase

Transmission charge of residential customers decreased by PhP0.0593 per kWh, while taxes and other charges also went down by PhP0.0839 per kWh this month.  The lower charges were partly due to the effect of last month’s reconciliation of the ERC-approved refundable amount.  

Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 27 months, after the registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP.

Meralco provides energy efficiency tips for customers

As the electricity rate slightly increases this month, Meralco once again advised its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy.  Simple tips such as unplugging appliances when not in use to avoid “phantom load.” Using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency. Using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously using just one switch. Maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance. For more helpful tips, customers may visit its website at www.meralco.com.ph or its social media accounts, twitter @meralco and facebook at www.facebook.com/meralco.