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Power rates slightly up after a month of rate cut — Meralco

MANILA, Philippines — After a price cut in the previous month, the Manila Electric Company (Meralco) said that it will implement a power rate hike in the month of May.

Meralco announced a slight increase in power rates by P0.4621 per kilowatt-hour (kWh), resulting in a new household rate of P11.4139 per kWh for this month, up from April's P10.9518.

According to the firm, the adjustment would lead to a rise of less than P92 in the total electricity bill for customers consuming 200 kWh.

The electricity provider attributed the rise in power rates to the increase in the generation charge, which climbed to P0.4455 per kWh. The surge was driven by higher costs from the Wholesale Electricity Spot Market (WESM) and Power Supply Agreements (PSAs).

Charges from the WESM also had an uptick by P1.7913 per kWh due to the tight supply of the Luzon grid during April.

It could be recalled that the power grids from Luzon, Visayas and Mindanao have been grappling with a persistent shortage in power supply since last month, prompting yellow and red alert statuses.

A red alert is issued when the power supply is insufficient to meet consumer demand and the transmission grid's operational requirements cannot be fully met.

A yellow alert is raised when the operating margin is too narrow to adequately cover the transmission grid's contingency needs.

Meralco noted that PSAs saw an increase of P0.2871 per kWh, attributed to decreased excess energy deliveries from certain PSAs.

Meanwhile, a reduction of P0.6942 per kWh in charges from Independent Power Producers (IPPs) helped offset potential increases in power rates.

"This month's IPP rate reflected the withholding of charges from First Gas, including the incremental Malampaya gas costs for First Gas-Sta. Rita under its new Gas Sale and Purchase Agreement (GSPA) and costs related to the use of Liquefied Natural Gas (LNG), other than the landed cost of LNG, in accordance with an order from the Energy Regulatory Commission," Meralco said in a statement.

During this period, Meralco sourced 30% of its total energy requirement from the WESM, 36% from PSAs, and 34% from IPPs.