POWER DISTRIBUTOR Manila Electric Co. (Meralco) expects a higher generation charge for February as the peso’s depreciation raises costs for dollar-denominated power contracts.
“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 the costs of our suppliers, most of whom have dollar-denominated contracts,” Joe R. Zaldarriaga, Meralco vice-president and head of corporate communications, said in a Viber message on Monday.
The generation charge typically accounts for more than 50% of the monthly electricity bill.
The peso closed at P58.365 on Jan. 31, weakening by 52 centavos from its P57.845 finish on Dec. 27.
Mr. Zaldarriaga also expects an increase in the transmission charge due to the scheduled collection of the remaining 70% of the reserve market settlement fee incurred in March 2024.
The Energy Regulatory Commission (ERC) directed the recovery of these fees over a three-month period beginning with the February billing, allowing power generators to recover their costs.
“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,” Mr. Zaldarriaga said.
In December last year, the ERC ordered private distribution utilities to refund unspent fees collected during the regulatory rate reset process, totaling P1.18 billion.
For Meralco, the refund amounts to P987.16 million, equivalent to around 23 centavos per kilowatt-hour (kWh) for its customers.
In January, the overall Meralco rate declined by P0.2189 per kWh to p11.7428 per kWh, driven by a lower generation charge during the period.
The generation charge fell by P0.1313 per kWh to P6.8358 per kWh, primarily due to lower costs from the Wholesale Electricity Spot Market and independent power producers.
Meralco is the main power distributor for Metro Manila and nearby areas, covering 39 cities and 72 municipalities, and delivering power to around eight million customers.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
