MANILA Electric Co. (Meralco) said on Wednesday that its electricity rates have increased by P0.1543 per kilowatt-hour (kWh) for September.
This brings the overall rate for a typical household to P11.7882 per kWh in September from the previous month’s P11.6339 per kWh, equivalent to an increase of around P31 for residential customers consuming 200 kWh.
Meralco said the increase was due to the P0.2913 per kWh hike in the transmission charge for residential customers in the given period due to higher ancillary service charges following the resumption of commercial operations of the Reserve Market on Aug. 5, 2024.
“Overall, the transmission charge for the period increased, which in turn made electricity rates rise and offset the reduction in the generation charge,” Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga said.
“The main reason for the increase of the transmission charge this month is mainly due to the increase in ancillary service charge brought about by the resumption of the Reserve Market on August 5, 2024,” he added.
Meralco said that the total ancillary service charges from the Reserve Market were double the charges from the National Grid Corporation of the Philippines’ (NGCP) Ancillary Service Procurement Agreements (ASPAs), as the share of ancillary service charges to NGCP’s transmission rate rose to more than 50 percent.
This month’s higher transmission charge more than offset the reduction in the generation charge, which in turn went down by P0.1547 per kWh for September.
Meralco said the decrease in the generation charge was primarily driven by the peso’s appreciation to its strongest level since December 2023, which affected 50 percent of power supply agreement (PSA) costs and 97 percent of independent power producer (IPP) costs that were dollar-denominated.
This led to the P0.2371 per kWh and P0.0529 per kWh reductions in PSA and IPP charges, respectively.
Wholesale Electricity Spot Market charges (WESM) also decreased by P0.0514 per kWh for the period and was already factored in the final of four installments of deferred May 2024 WESM costs earlier ordered by the Energy Regulatory Commission (ERC).
PSAs, WESM, and IPPs accounted for 46.2 percent, 27.3 percent, and 26.4 percent, respectively, of Meralco’s total energy requirement for the period.
Meanwhile, taxes and other charges registered a P0.0177 per kWh net increase for the period, while pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are all remitted to the government.
Meralco also said its distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.
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