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Meralco rate rises in April

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PHILIPPINE STAR/MICHAEL VARCAS

By Adam J. Ang

Consumers in Metro Manila will likely see an increase in their electricity bills in April with a typical households set to see a P21 hike, Manila Electric Co. (Meralco) said on Thursday.

The rate hike comes amid falling demand in Luzon where most economic activities have been halted due to the enhanced community quarantine.

In a statement, Meralco said that the overall electricity rate rose by P0.1050 per kilowatt-hour (kWh) to P8.9951/kWh from March’s P8.8901/kWh.

Households consuming 300 kWh, 400 kWh, and 500 kWh could expect their monthly bills to rise by P31.50, P42.00, and P52.50, respectively.

The rate increase was due to the normalization of the universal charge, after a one-time refund in the universal charge-NPC stranded contract costs (UC-SCC).

Last March, the Energy Regulatory Commission (ERC) ordered Meralco to implement a P0.1453/kWh rate reversal in the UC-SCC, representing collections in excess of the amount due to Power Sector Assets and Liabilities Management Corporation (PSALM).

Universal charges are remitted to the government for the electrification in off-grid areas, the National Power Corporation’s financial obligations in excess of privatization proceeds, and watershed rehabilitation and management.

However, Meralco noted that the April rate is still “significantly” lower compared to the rate in the same month in 2019.

It said the rate hike is tempered by the P0.0495/kWh decrease in the feed-in tariff allowance (FiT-All) for April, following the suspension of its collection as ordered by the ERC.

Recently, Meralco claimed a force majeure event during the Luzon-wide enhanced community quarantine, bringing down generation charges for its customers.

The distribution utility invoked a force majeure provision in its Power Supply Agreements (PSA), lowering fixed charges for generation capacity that was not consumed, as power demand dropped.

The National Grid Corp. of the Philippines earlier noted that electricity demand in the Luzon grid declined around 20-30% amid the Luzon-wide lockdown due to the coronavirus disease 2019 (COVID-19) pandemic.

Generation charges for this month dropped by P0.0247/kWh to P4.6385/kWh, significantly lower compared to the April 2019 generation rate of P5.6322/kWh.

A force majeure event is an uncontrollable event that makes it impossible for power plant operators to fulfill their obligations. Without this, Meralco said that generation rate would have increased by P0.0259/kWh from last month’s rate.

Cost of power from its PSAs, which accounts to 51% of Meralco’s total electricity supply, was lowered to P0.1696/kWh, while charges from Independent Power Producers, which supplies 38% of the utility’s power needs, also decreased by P0.0965 due to higher average plant dispatch and Peso appreciation.

Moreover, charges from the Wholesale Electricity Spot Market, which has an 11% share in its supply needs, fell by P0.9429/kWh driven by improved supply conditions in the Luzon grid.

Earlier, Meralco announced a one-month extension of payments of bills falling from March 1 to April 14 in part of its measures to help households affected by the ECQ. Bills for the period will be computed based on customers’ average electricity consumption from January to March.

The ECQ has been extended until end-April.

Meralco’s controlling stakeholder, 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 interest in BusinessWorld through the Philippine Star Group, which it controls.





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