POWER DISTRIBUTOR Manila Electric Co. (Meralco) is expecting an increase in electricity rates this month due to higher costs that are passed directly to its customers.
“Indications point to possible higher rates in the November due to increase in pass-through charges,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in a statement on Sunday.
Mr. Zaldarriaga attributed the potential increase to the recently approved new feed-in tariff allowance (FIT-All) by the Energy Regulatory Commission, which will result in an additional P0.0884 per kilowatt-hour (kWh) in the rates this month.
The FIT-All is a uniform charge billed to all on-grid electricity consumers to support the development and promotion of renewable energy.
Contributing to the possible rate hike are the higher prices in the Wholesale Electricity Spot Market (WESM) and reserve market prices in the previous supply month, adding upward pressure on generation and transmission charges.
The WESM is where energy companies can buy power if their long-term contracted power deals prove inadequate for their needs
The Independent Electricity Market Operator of the Philippines earlier reported that the average WESM price jumped by 49.4% month on month to P4.54 per kWh in October, due to thinning supply margins.
The available supply dropped by 4% to 19,889 megawatts (MW), while demand increased by 1.8% to 13,881 MW.
“In addition, the continued depreciation of the peso to historic lows is expected to affect dollar-denominated costs from independent power producers and power supply agreements,” Mr. Zaldarriaga said.
The Philippine peso hit a record low of P59.13 on Oct. 28, amid concerns over economic growth.
The peso closed at P58.85 per dollar on Oct. 30, weakening by P0.654 from its P58.196 finish on Sept. 30, according to the Bankers Association of the Philippines’ reference exchange rate.
“We’re finalizing the rate and will announce the actual movement this coming week,” Mr. Zaldarriaga said.
For October, Meralco rates increased by P0.2331 per kWh to P13.3182 per kWh, due to higher generation charges.
Meralco is the main power distributor for Metro Manila and nearby areas, covering 39 cities and 72 municipalities, and delivering power to over 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
