MERALCO to Implement Staggered Increase in Generation Charges

07 March 2023/ERC-Planning and Public Information Service

PASIG CITY – The Manila Electric Company (MERALCO) informed the Energy Regulatory Commission (ERC) of the implementation of a deferred collection of around P1.1 Billion of generation charges over a two-month period to cushion the impact of increases in generation charges for the month of January-February 2023.

In a Special Commission Meeting held earlier today (7 March 2023) the Commission noted the deferred collection plan contained in MERALCO’s letter received by ERC on 6 March 2023. In its letter, MERALCO advised that the deferral of P1.1 Billion will result in an increase of P0.62/kWh in its total rate for March and April 2023. This total rate is less than the expected increase of about P0.92/kWh plus other adjustments for VAT and systems loss for the February supply month. Such increase shall be subject to further validation by the Commission as to compliance with the underlying power supply agreements and substantiation of any fuel pass through component, as applicable.

According to MERALCO, some of its suppliers had to use more expensive alternative fuels to ensure the continuous supply of electricity during the scheduled maintenance outage of SPEX-Malampaya natural gas from 4 to 18 February 2023. It further claimed that the escalation of prices in the Wholesale Electricity Spot Market (WESM) contributed to the expected increase in the generation charge in its franchise area.

A typical 200kWh residential customer is expected to experience a total rate increase of P1.11 per kWh when other billing components, such as systems loss and taxes, are included.

In the said letter, MERALCO stated that it coordinated with several of its power suppliers to request the deferral of charges from their billings for February to cushion the impact of the increase in generation rate to its customers.