Manila Electric : Electricity rates go up in December

Weaker peso causes increase in generation charge

MANILA, PHILIPPINES, 7 December 2016 - After four straight months of reduction totaling PhP0.35, Meralco announced that there will be a slight increase in the rate for a typical household this December of PhP0.1011 per kilowatthour (kWh), thereby bringing it to PhP8.36 per kWh.

This translates to an increase of around PhP20 in the total electricity bill of a household with monthly consumption of 200 kWh. The increase this month is mainly due to the upward movement in the generation charge.

This month's overall rate is still lower by PhP0.25 per kWh compared to December 2015's PhP8.61 per kWh.
Weaker peso causes generation charge increase

This month, there was an increase in the generation charge, which is PhP0.0915 per kWh higher than last month's PhP3.8436 per kWh. At PhP3.9351 per kWh, the generation charge is PhP0.1948 per kWh lower compared to December 2015's PhP4.1299 per kWh.

The increase resulted mainly from a significant weakening of the peso against the US dollar. From a level of PhP46.580/US$ in August, the peso depreciated to PhP48.405/US$ in October, and further to PhP49.73/US$ in November.

Partly because of this, the cost of power from the Independent Power Producers (IPPs), whose billings are around 96% dollar-denominated, increased by PhP 0.2615 per kWh. The increase is also due to lower dispatch this month with the scheduled maintenance of Sta. Rita Module 30 during the whole supply month. The share of the IPPs to Meralco's total requirements for November was at 36.4%.

Cost of power sourced from plants under the Power Supply Agreements (PSAs) also increased by PhP0.2214 per kWh mainly due to higher fuel cost and the weakening of the peso against US dollar. PSA billings are likewise affected by peso depreciation as around two-thirds of their costs are dollar-denominated. The share of PSAs stood at 40.8%.

On the other hand, overall charges from the Wholesale Electricity Spot Market (WESM) decreased by PhP0.3734 per kWh, which partly mitigated the higher charges from the IPPs and PSAs. Spot prices have remained low in November because of lower demand and fewer outages compared to last month. The share of WESM purchases to Meralco's total requirements went up from 20.1% to 22.5%.
Adjustments in other bill components

There was also an increase in thetransmission charge of residential customers by PhP0.0031 per kWh, mainly due to the slight increase in the ancillary service charges.

Taxes and other charges also increased by a combined amount of around PhP0.0065 per kWh.

Meralco's distribution, supply, and metering charges, meanwhile, have remained unchanged for 17 months, after these registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines (NGCP).
Meralco encourages energy safety and efficiency this Christmas season

In preparation for the upcoming holidays, Meralco invites its customers to practice energy safety and efficiency, especially with Christmas lights. Here are a few useful tips that consumers can follow when buying or using Christmas lights this December:

- When buying Christmas lights, test them first and ensure that all bulbs are functioning, and that the plug is not loose
- LED Christmas lights can save you up to PHP 60 per month compared to incandescent bulbs
- Choose LED Christmas lights not only to save on energy but also to be safe from accidents
- If reusing old Christmas lights, check the bulbs and the plug, and ensure that these are still working properly
- Do not use indoor-type lights and décor for outdoor purposes
- When replacing light bulbs, care should be taken and be sure that the Christmas light set is unplugged