Philippines: Refund completion triggers Meralco rate hike in December

MANILA, Philippines — Households and businesses in areas served by Manila Electric Co. (Meralco) can expect higher electricity bills in December after the power distributor completed one of its mandated refunds to customers, which tempered benefits from lower generation charges.

In a statement on Friday, the largest power distributor in the country said the overall electricity rate went up by P0.3297 per kWh to P10.2769 per kWh this month. That translates to an increase of around P66 in the total electricity bill of a typical household consuming 200 kWh.

Explaining the adjustment, Meralco said it has completed a distribution-related refund for customers which, in turn, triggered a rate hike at a time the cold weather typically pulls down electricity rates because of low demand for air conditioning.

Meralco has yet to complete three refunds totaling P1.3340 per kWh that continue to temper residential customers’ monthly bills. These are expected to be fully refunded by December 2022, January 2023 and May 2023.

But a reduction to the December bill would have been a welcome news to customers bracing for even higher food prices this month due to the Holiday season. Inflation sizzled to a 14-year high of 8% in November, adding strain to Filipinos’ budgets.

Lower generation costs

Meralco said the completion of the refund was enough to offset a decrease in generation costs that were passed on to customers.

Charges from power supply agreements — where Meralco sourced 52% of its energy requirement for the month — went down by P0.2079 per kWh as the First Natgas-San Gabriel plant went back online after a scheduled maintenance outage. The peso’s appreciation, which affected 38% of dollar-denominated PSA costs, also contributed to the reduction.

Energy prices from the spot market fell by P1.3985 per kWh due to improved supply situation in the Luzon grid. However, Meralco paid more for electricity it bought from independent power producers, which increased their charges by P0.0545 per kWh.

Transmission charge for residential customers increased by P0.0753 per kWh due to higher ancillary service charges of the National Grid Corporation of the Philippines.