Metro Manila residents will see a small increase in their electricity bills for August. The Manila Electric Company (Meralco) announced a Php 0.0327 per kilowatt-hour (kWh) hike on Monday, bringing the overall rate to Php 11.6339 per kWh from Php 11.6012 per kWh in July.
This translates to an additional Php 7 for residential customers consuming 200 kWh. The increase is from higher transmission charges, which rose by Php 0.1086 per kWh. The grid operator implemented this hike to bolster ancillary services to maintain grid stability. Ancillary service charges reportedly doubled this month for contingency and dispatchable reserves.
However, a Php 0.0503 per kWh reduction in the generation charge couldn’t offset the transmission cost increase. While charges from Independent Power Producers (IPPs) decreased, rates from the Wholesale Electricity Spot Market (WESM) and Power Supply Agreements (PSAs) went up. Meralco sources its power with 40% from PSAs, 33% from IPPs, and 27% from WESM.
Meralco also warned consumers about a potential future increase in generation costs from First Gas-operated plants in Sta. Rita and San Lorenzo, which rely on Malampaya natural gas. With the expiration of the old Gas Sale and Purchase Agreement (GSPA) last month, these plants are now covered by a new agreement with the Malampaya Consortium. Though pricing from the old GSPA is still being used for both facilities until regulatory approval for the new agreement, the situation could change.
While the increase for August is minimal, the potential impact of the new Malampaya gas agreement on future electricity bills remains to be seen.
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