THE OVERALL electricity rate may increase in July due to anticipated increases in generation and transmission charges, Manila Electric Co. (Meralco) said on Tuesday.
“While we have yet to receive all the final billings from our suppliers, indication point to a possibility of an increase in the generation charge this month,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in a statement.
Mr. Zaldarriaga attributed the potential upward adjustment in the cost of purchased power to the depreciation of the peso, which will affect the dollar-denominated costs of the power distributor’s suppliers.
“We hope that the expected increase will be mitigated by lower WESM (Wholesale Electricity Spot Market) charges,” he said.
The Independent Electricity Market Operator of the Philippines earlier reported a 3.9% decline in the average WESM rate to P3.86 per kilowatt-hour (kWh) for the June supply period amid a stable supply margin.
For Luzon alone, the WESM rate decreased by 0.32% to P3.91 per kWh from P4.23 per kWh a month earlier.
The WESM is a centralized venue where energy companies can buy power when their long-term contracted supply is insufficient for customer demand.
“We also see possibility of higher transmission charge due to the pressure in reserve market prices for the June supply month compared with the previous month,” Mr. Zaldarriaga said.
The generation charge typically accounts for more than 50% of the monthly electricity bill, while the transmission charge accounts for nearly 3%.
Last month, Meralco’s electricity rate decreased by P0.1099 per kWh to P7.3552 per kWh, primarily due to lower generation charges.
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 Business-World through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
