Malampaya shutdown prompts Meralco to hike November power rates

Meralco linemen inspect meters on Road 10 in Tondo, Manila, in this file photo.

The shutdown of the Malampaya gas facility last month hiked electricity rates by P0.3256 per kilowatt-hour (kWh) to P9.4630 per kWh in November from P9.1374  per kWh in October, the Manila Electric Co. (Meralco) announced Friday.

This month’s power rate adjustment is equivalent to an increase of around P65 in the total bill of a residential customer consuming 200 kWh.

The Malampaya shutdown from October 2 to 25 led to an increase in generation charge, a major component of an electricity bill.

The November generation charge went up by P0.2911 per kWh to P5.3346 per kWh from P5.0435 per kWh the previous month.

Meralco explained that the Malampaya facility maintenance shutdown resulted to lesser available supply in the Wholesale Electricity Spot Market (WESM). The tight supply condition in the Luzon grid led to higher WESM prices at P1.7073 per kWh and triggered the WESM secondary price cap on September 30, October 1, October 21 and 22.

The Luzon grid was also placed on Yellow Alert on October 20 due to forced outages of several power plants. 

Charges from Independent Power Producers (IPPs) also increased by P0.8186 per kWh.  

Charges from Power Supply Agreements (PSAs), on the other hand, went down by P0.2841 per kWh mainly due to higher excess energy deliveries, which are priced at a discount, from AC Energy, First Gen Hydro Power, San Miguel Energy and South Premiere Power. 

The new PSA of Meralco with the Power Sector Assets and Liabilities Management Corp. (PSALM) also contributed to the decrease in the PSA rate. 

WESM, IPPs and PSAs accounted for 13.9, 37.4, and 48.7 percent, respectively, of Meralco’s energy requirement.

Meralco utility economics head Lawrence Fernandez said this month’s generation charge increase would have been significantly higher, but Meralco took the initiative to cushion the impact in the bills of its customers.

He explained that the generation charge increase is around 29 centavos/kWh. This would have been higher, at around 81-centavos/kWh, but a portion of the increase will instead be deferred to the next four months.

“The difference of 52 centavos per kWh will be amortized and added to the December, January, February and March bills at a rate of around 13-centavos per kWh, or 52-centavos divided by four,” Fernandez explained.

Meralco said it coordinated with some of its suppliers to defer collection of portions of their generation costs. These deferred charges will subsequently be billed on a staggered basis over the next four months as directed by the Energy Regulatory Commission (ERC).

Meralco’s continued implementation of the Distribution Rate True-Up refund, which began in March 2021, also helped temper the overall increase. 

The refund rate for residential customers is at P0.2761 per kWh.

It can be recalled that the ERC provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. This amount represented the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020.

Meanwhile, transmission charge for residential customers decreased by P0.0403 per kWh due to lower Ancillary Service and Power Delivery Service charges. 

Taxes, system loss and other charges, registered an increase of P0.0748 per kWh. 

The collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.

Image credits: Nonie Reyes


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