Power retailer Manila Electric Co. (Meralco) is hoping that its one-time refund of P0.23 per kilowatt-hour would offset the anticipated higher generation charges for February 2025.
“We are still waiting for all the final billings from our suppliers, but initial indications point to a higher generation charge due to peso depreciation, which affects costs of our suppliers which are mostly dollar-denominated,” Meralco spokesman Joe Zaldarriaga said.
“On top of this, we are expecting increase in transmission charge component of the overall rate with the collection of the remaining 70 percent of the reserve market settlement fees incurred in March last year,” he said.
The Energy Regulatory Commission (ERC) directed the recovery of the reserve market settlement fees over a period of three months beginning the February billing.
“We hope these upward pressures will be somehow tempered by the one-time refund of regulatory reset costs of distribution utilities similarly ordered by the ERC effective this month. This is equivalent to around P0.23 per kWh for Meralco customers,” Zaldarriaga said.
Meralco is expected to release its final computation on Feb. 11, 2025.
Power rates in January went down by an average of P0.2189 per kWh due to lower generation charges, which translated into a decrease of around P44 in the monthly electricity bill of customers with an average consumption of 200 kWh.
Meralco’s overall rate for a typical household declined to P11.7428 in January from the previous month’s P11.9617 per kWh.
Its generation charge went down by P0.1313 per kWh to P6.8358 per kWh, primarily due to lower charges from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs), which decreased by P0.8840 per kWh and P0.1593 per kWh, respectively.
The reduction in WESM charges was brought about by the improved supply situation in the Luzon Grid as average peak demand dropped by 471 MW due to cooler temperatures. The average capacity on outage also decreased by 305 MW.
IPP charges went down because of the appreciation of the peso, affecting 97 percent of IPP costs that were dollar-denominated as well as lower cost of fuel and higher dispatch of the First Gas-Sta. Rita plant.
These reductions tempered the P0.5638 per kWh increase in charges from power supply agreements (PSAs) due to lower plant dispatch.
Meralco sourced bulk of its power supply requirement from the PSAs at 36 percent, followed by WESM at 34 percent and IPPs at 30 percent.
