Meralco rates rise this month on higher transmission charges

RESIDENTIAL customers of Manila Electric Co. (Meralco) will see higher electricity bills this month after the power distributor raised rates, mainly due to higher transmission charges.

In a statement on Tuesday, Meralco announced an increase of P0.2226 per kilowatt-hour (kWh), ending two consecutive months of reductions. This brought the overall rate for a typical household to P13.1734 per kWh this month from P12.9508 per kWh in January.

Households consuming 200 kWh will pay about P45 more this month. Those consuming 300 kWh, 400 kWh, and 500 kWh will see increases of around P67, P89, and P111, respectively.

Meralco attributed the rate hike mainly to higher transmission charges, which rose by P0.1975 per kWh due to a significant increase in ancillary service charges from the reserve market and higher power delivery service charges.

The company also cited the start of the collection of an additional P0.0770 per kWh in the universal charge for missionary electrification (UCME). This followed the Energy Regulatory Commission’s (ERC) approval of a new UCME rate of P0.2763 per kWh, up from P0.1993 per kWh previously.

UCME is collected from all on-grid electricity end-users to help subsidize power costs in remote areas not connected to the main transmission grid.

Other charges, including taxes, posted a net increase of P0.0554 per kWh.

Cushioning the impact of these increases was a decline in the generation charge, which fell by P0.1073 per kWh to P7.6398 per kWh.

Charges from independent power producers (IPPs) decreased by P0.8108 per kWh, partly offsetting higher charges from the Wholesale Electricity Spot Market (WESM) and power supply agreements (PSAs).

Tighter supply conditions in the Luzon grid led to an increase of P1.5682 per kWh in WESM costs sourced by Meralco.

Meanwhile, lower dispatch due to the planned maintenance shutdown of two major gas plants contributed to a P0.0483-per-kWh increase in PSA charges.

IPPs, WESM, and PSAs accounted for 24%, 10%, and 66%, respectively, of Meralco’s total energy requirement for the period.

“Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and renewable energy subsidies are all remitted to the government,” Meralco said.

Meralco’s distribution charge has remained unchanged since the P0.0360-per-kWh reduction for a typical residential customer in August 2022.

With the summer season approaching, Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said the company has been ensuring its supply requirements are covered as demand is expected to rise due to hotter weather.

“Since our responsibility really is to provide all our customers with electricity during the crucial period of the summer months, we make sure we have our supply adequately covered,” he said in a briefing.

Meralco is the country’s largest private electric distribution utility, serving over 8.1 million customers in Metro Manila and surrounding provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.

Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera