Meralco to increase power rates this month

ELECTRICITY rates will go up this month because of higher generation charge, Manila Electric Co. (Meralco) said on Wednesday.

“Last year, it was around 92 centavos. This year, we think it will be in that range. It might be even higher,” Lawrence Fernandez, Meralco vice president and head of utility economics, told reporters on the sidelines of the Energy Forum of Asia CEO Forum.

Fernandez attributed the higher generation charge to the depreciation of the peso and repricing of

“Just like 2015, 2016, 2017, January is always a low generation charge month because of the outage allowance reconciliation,” he explained. “We always expect a sig charge from January to February.”

In January, Meralco slashed its rates by P0.5260 per kilowatt hour (kWh) owing to cheaper power supply deals and lower charges at the Wholesale Electricity Spot Market (WESM).

That meant electricity rates went down from P9.2487 per kWh in December to P8.7227 per kWh in January.

The lower power rates, according to Meralco, was due to a P0.5277 per kWh reduction in the generation charge.

The utility company earlier warned that electricity rates could increase in February because of the higher excise tax on coal and value added tax (VAT) on the transmission charge.

“By February 2018, typical households may be paying P16.16 on top of their monthly bill because of [Republic Act 10963, or the Tax Reform for Acceleration and Inclusion] Train [Act],” Meralco said in a presentation to media.

The generation charge could increase by P0.0113 per kWh, system loss charge by P0.0009 per kWh, and VAT on transmission by P0.0670 per kWh.