Meralco September rates increase on higher generation charge

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MANILA, PHILIPPINES, 8th September 2022 – After the combined reduction of P0.9154 per kWh in the past two months, the Manila Electric Company (Meralco) announced today that the overall rate for a typical household in September went up by P0.3907 per kWh to P9.9365 from P9.5458 per kWh in August.

For residential customers consuming 200 kWh, this is equivalent to an increase of around P78 in this month’s power bills.

Higher fuel costs, weaker Peso push generation charge upward

Generation charge for September went up by P0.3581 to P6.9393 per kWh from the P6.5812 per kWh the previous month.

Charges from the Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) increased by P0.8026 and P0.3316 per kWh, respectively, driven by higher fuel costs and Peso depreciation.

The ongoing Malampaya gas supply restriction necessitated the increased use of more expensive alternative fuel by First Gas Sta. Rita and San Lorenzo to ensure continuous supply.

Peso depreciation also pushed up charges from the IPPs and PSAs since 98% of total IPP costs and 36% of PSA costs are dollar-denominated.

The continued rise in international coal prices also contributed to the PSA rate increase.

The higher PSA and IPP costs were partly mitigated by lower charges from the Wholesale Electricity Spot Market (WESM), which registered a reduction of P3.7473 per kWh as the supply situation in the Luzon grid improved.

With the decrease in average daily peak demand, there was no Yellow Alert in August and the frequency of secondary price cap imposition went down to 4.7% of the time from 27.62% in July.

PSAs, IPPs, and WESM accounted for 48%, 42%, and 10%, respectively, of Meralco’s energy requirement for the period.

Transmission and other charges

Meanwhile, transmission charge for residential customers decreased by P0.0432 per kWh due to lower Ancillary Service charges.

Taxes and other charges, on the other hand, registered a net increase of P0.0758 per kWh, including the additional P0.0239 per kWh to the Universal Charge for Missionary Electrification (UCME) as recently ordered by the Energy Regulatory Commission (ERC). With this adjustment, universal charges now total P0.2228 per kWh from P0.1989 per kWh previously.

Pass-through charges from generation and transmission are paid to the power suppliers and the system operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are all remitted to the government.

Meralco only earns from distribution, supply, and metering charges, which went down by P0.0360 per kWh in August for a typical residential customer.

Prior to this adjustment, Meralco’s distribution charges were unchanged since the reduction in July 2015.

The ongoing distribution-related refunds, equivalent to a total refund rate of P1.8009 per kWh for residential customers, also continue to temper customers’ monthly bills.

Customers urged to practice electrical safety and energy efficiency

With the ongoing rainy season, Meralco advises its customers to practice safety measures and prepare for floods or typhoons.

Customers are urged to charge mobile phones, flashlights, and other important gadgets or rechargeable appliances.

During typhoons, use rubber boots and gloves for added protection. In case of flooding, switch off circuit breakers and make sure electrical wires and devices are dry before touching them.

If outlets or appliances got drenched, have a licensed electrician check these before using.

Meralco also empowers its customers to continue practicing energy efficiency.

Customers can know how much their gadgets and appliances consume through the Appliance Calculator on the Meralco Mobile App, as this will help them stay in control and better manage their monthly consumption.

For more bright ideas and energy efficiency tips, customers may also visit or follow Meralco on Facebook and Instagram: @meralcoph.



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