Electricity rates up this month

November 13, 2024 | 12:00am

MANILA, Philippines — The eight million customers of power distributor Manila Electric Co. (Meralco) should brace for higher rates this month as generation costs rose due to increased demand and peso depreciation.

At a press conference yesterday, Meralco spokesman Joe Zaldarriaga announced an upward adjustment of P0.4274 per kilowatt-hour in November, bringing the overall rate to P11.8569 per kWh from last month’s P11.4295 per kWh.

This translates to an increase of around P85 in the electricity bills of typical households consuming 200 kWh a month.

The generation charge, which increased by about P0.29 per kWh this month, covers the cost of power purchased from independent power producers (IPPs), the Wholesale Electricity Spot Market (WESM) and power supply agreements (PSAs).

Charges from IPPs and PSAs were higher by P0.9392 and P0.4295 per kWh, respectively, largely due to further weakening of the local currency against the US dollar.

The peso closed at P58.10 to the dollar last month, weaker by over P2 compared to the P56.03:$1 recorded at the end of September.

The said weakening, Zaldarriaga said, affected 98 percent of IPP costs and 49 percent of PSA charges that were dollar-denominated.

WESM charges, meanwhile, edged up by around P0.02 per kWh, driven by higher consumer demand due to more economic activities ahead of the Christmas season.

IPPs, PSAs and WESM accounted for 24 percent, 47 percent and 29 percent, respectively, of Meralco’s total energy requirement for the period.

Also contributing to the rate hike this month was the P0.0724 per kWh increase in the transmission charge following higher ancillary service (AS) charges from the WESM reserve market.

AS charges refer to costs passed on to consumers to support services used to balance and stabilize the power grid during supply-demand imbalance.

Meanwhile, consumers with a monthly consumption of less than 200 kWh in areas placed under a state of calamity are spared from disconnection until December this year, according to Meralco.

They can also avail themselves of staggered payment arrangements for six months for their electricity bills from October to December.

This followed the recent directive of President Marcos and the Energy Regulatory Commission to provide temporary relief to power users in storm-hit areas.

“Meralco has always been considerate of its customers, especially during challenging times. We join the government in efforts to help those severely affected by the storm recover as soon as possible,” Zaldarriaga said.