Meralco rates up by 10.3436/kwh this month

The rate of Manila Electric Company (Meralco) this November billing cycle will be higher by 10.3436 per kilowatt hour due to combined pressures of tight supply and the falling value of the Philippine peso.

And to the average household end-user with base con-

sumption of 200 kilowatt hours (kwh), that will redound to an overall increase of 168.72 in their bills.

Fundamentally, the overall rate of Meralco this month went up to 19.6272 per kwh from the month-ago level of 19.2836 per kwh.

The other cost components that exerted pressure on power rates this month had been the P0.0860 per kwh increase in the ancillary services charge of the National Grid Corporation of the Philippines (NGCP); while taxes and other charges similarly climbed by 10.0651 per kwh.

The utility firm mainly attributed this month’s rate hike to the increase in generation charge, pegged at 10.1925 per kwh.

There had also been marked increase in prices for power sourced from the Wholesale Electricity Spot Market (WESM) to the tune of 10.4810 per kwh in the last supply month.

Meralco further indicated that “despite the reduction in Luzon power demand this month, spot market prices increased due to tighter supply conditions.”

Notably, the grid suffered several incidents of “yellow alerts” last month, inferring the lack of reserves in the power system – which consequently resulted in spikes in the spot prices of electricity.

On its purchase of capacity from independent power producers (IPPs) and power supply agreements (PSA) with other private power providers, Meralco further noted corresponding cost increases of 10.2868 per kWh and 10.0076 per kWh, respectively.

Such cost increases, according to the utility firm, had been “due to the weakening of the peso against the US dollar,” emphasizing that “peso depreciation had a much larger impact on IPP costs because around 97 percent of IPP costs are dollar-denominated.”

Conversely, the impact of the peso depreciation on power supply agreements had been “moderated by a lower share of costs in US dollars at around 58 percent.”