By Sheldeen Joy Talavera, Reporter
Residential customers of Manila Electric Co. (Meralco) will face higher electricity bills this month after the distribution utility raised charges, driven mainly by higher generation costs linked to the peso’s depreciation.
Meralco announced on Friday a rise of P0.5335 per kilowatt-hour (kWh), bringing the general rate to P14.3496 per kWh in April, up from P13.8161 per kWh in March.
The upward adjustment translates to a rise of P107 within the monthly electricity bill of households consuming 200 kWh, the corporate said in an announcement.
Households consuming 300 kWh, 400 kWh, and 500 kWh pays an extra P160, P213, and P267, respectively.
Meralco Spokesperson Joe R. Zaldarriaga said the speed hike was driven by higher generation charges, which rose by P0.5257 per kWh to P8.3864 per kWh, largely as a result of the weakening of the peso against the US dollar.
The Philippine peso closed at a record low of P60.748 per US dollar on March 31, weakening by P3.083 from its Feb. 27 finish of P57.665.
The peso’s depreciation affected just about all of Meralco’s supply costs from gas-fired plants, in addition to 44% of its power supply agreements, that are denominated in US dollars.
Charges from the Wholesale Electricity Spot Market (WESM) — the venue for trading electricity — also increased by P2.3955 per kWh as a result of tight supply conditions within the Luzon grid.
Global markets, particularly those reliant on imported oil, proceed to face volatility in supply and costs amid disruptions within the Middle East.
While oil-based power generation accounts for less than a small share of the Philippines’ electricity mix, rising oil prices also exert upward pressure on the price of gas and coal, which the country largely imports.
Nonetheless, Meralco officials noted that the rise in generation charges has yet to reflect expected fuel price increases resulting from the Middle East war.
Lawrence S. Fernandez, Meralco vice-president and head of utility economics, said this month’s electricity rates haven’t yet been affected by the conflict, because the fuel supply utilized in March had been procured before the outbreak.
“We expect the impact on fuel costs to be reflected within the May generation charge,” he said.
He added that recent government measures, comparable to the suspension of spot market trading and the introduction of a brand new pricing mechanism, are intended to mitigate any sharp increase in generation costs.
Tempering this month’s rate hike was a decline in transmission charges, which fell by P0.0656 per kWh as a result of lower ancillary service charges incurred by the grid operator from the reserve market.
Other charges, including taxes, registered a net increase of P0.0734 per kWh.
Mr. Fernandez said it’s difficult to project next month’s electricity rates as a result of multiple aspects, particularly foreign exchange movements.
“That might contribute to downward pressure on generation costs. Nonetheless, fuel costs are exerting upward pressure. So we’ll should wait until the tip of the month, once we receive the bills from our suppliers, to find out what the web impact will likely be,” he said.
Amid the dry season and continued volatility in global markets as a result of the Middle East conflict, Meralco urged customers to practice energy efficiency to higher manage electricity consumption.
“We urge our customers to proceed practicing energy efficiency and conservation. Beyond helping manage consumption and electricity bills, these practices can contribute to mitigating the impact of external aspects on electricity costs,” Mr. Zaldarriaga said.
On the availability side, the corporate said there will likely be no rotational brownouts despite the country being under a state of national energy emergency.
“The Department of Energy’s latest simulations showed that there is no such thing as a expected supply deficiency within the Luzon grid, even throughout the summer period,” Mr. Fernandez said.
Meralco is the country’s largest private electric distribution utility, serving greater than 8.2 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Useful Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.