Residential customers of Manila Electric Co. will face higher bills this month. — PHILIPPINE STAR/RUSSELL PALMA

RESIDENTIAL customers in areas served by Manila Electric Co. (Meralco) are set to pay higher bills this month due to an increase in transmission charges.

In a statement on Thursday, Meralco said the overall rate for a typical household went up by P0.23 per kilowatt-hour (kWh) to P12.05 per kWh in November from P11.82 last month.

Households that consume 200 kWh can expect to pay about P47 more in their monthly electricity bills, Meralco said.

Residential customers that consume 300 kWh, 400 kWh, and 500 kWh will see their bills go up by P70, P94, and P117, respectively.

Meralco said the transmission charge rose by P0.12 per kWh due to higher ancillary service charge.

The National Grid Corp. of the Philippines’ (NGCP) ancillary service charge surged to P91.35 per kilowatt (kW) from P23.17 per kW.

In October, the Energy Regulatory Commission (ERC) approved an additional 257.78 megawatts worth of regulating reserves for ancillary service procurement agreements. This accounted for 76.5% of total ancillary service charges.

Regulating reserve refers to the available and dispatchable generating capacity allocated to correct any deviations triggered by “unpredicted variations in demand or generation output.”

Joe R. Zaldarriaga, Meralco spokesperson and vice-president for corporate communications, said at a virtual briefing the higher generation rates for November had also triggered the increase in the overall rate.

Generation charge, which accounted for the bulk of consumer’s power bills, increased by P0.07 to P7.19 per kWh in November from P7.13 last month due to higher charges from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPP).

Charges from WESM, which accounted for 14.3% of Meralco’s supply requirement, went up by P1.09 to P7.22 per kWh. The secondary price cap was triggered 7.22% of the time in October due to tight power supply in Luzon. 

IPP charges, which accounted for 32.5% of Meralco’s energy requirement, climbed by P0.11 to P7.71 per kWh on lower dispatch and higher Malampaya natural gas prices.

The Malampaya natural gas prices adjust every quarter based on oil prices and other fuels in the past six months.

However, charges from power supply agreements, which accounted for the majority of Meralco’s generation charge component at 53.2% share, fell by P0.30 to P6.87 per kWh. This helped temper the increase in the generation charge.

Other charges recorded a total increase of P0.05 per kWh, following the continued suspension of the feed-in-tariff allowance collection.

Distribution charge remains unchanged at P0.04 per kWh reduction since August last year.

Power rates are likely to go down through February due to colder weather, said Lawrence S. Fernandez, Meralco vice-president and head of utility economics.

“What we are expecting to happen is charges from the spot market will go down like what was said demand is typically lower due to colder temperatures and that will put downward pressures on WESM prices,” Mr. Fernandez said.

He noted some power plants are expected to go online and resume operations after being on maintenance which will provide additional supply to the grid.

“When you have better supply and lower demand, WESM charges are usually lower, so that is what we are hoping for in December,” Mr. Fernandez said.

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 a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose