Customers of Manila Electric Co. (Meralco) should expect higher electricity bills this month after the power distributor hiked its household power rate amid higher generation costs.

In an advisory, Meralco said it adjusted its rate by 8.46 centavos per kilowatt-hour (kWh) for January, bringing the overall overall rate for a typical household to P11.3430 per kWh from P11.2584 per kWh in December.

The upward adjustment could translate to an increment of P17 in this month’s bill of a residential customer consuming 200 kWh.

Meralco attributed the rate increase to higher generation charge, which inched up by 11.36 centavos to P6.6468 per kWh from P6.5332 per kWh last month, “owing to higher cost of power from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).”

In particular, WESM charges grew by 56.11 centavos per kWh due to higher average capacity on outage in the Luzon grid, which increased by around 418 MW.

Charges from IPPs also increased by 13.84 centavos per kWh due to higher fuel costs of First Gas-Sta. Rita and San Lorenzo resulting from the use of imported liquefied natural gas (LNG) in the testing and commissioning of its LNG terminal.

WESM and IPPs accounted for 20.5% and 36.5%, respectively, of Meralco’s total energy requirement for the period.

Tempering the increase in generation charge was the 15.22-centavo per kWh reduction in charges from Power Supply Agreements (PSAs) with the lower charges from Emergency PSAs —with Therma Luzon Inc. and South Premiere Power Corp.— and higher excess energy deliveries from some PSAs, which were priced at a discount.

Share of PSAs for the December supply month was at 43%.

Meralco said its transmission and other charges, meanwhile, registered a net reduction of 2.90 centavos per kWh.

Moreover, the collection of the Feed-In Tariff Allowance (FIT-All), at the rate of 3.64 centavos per kWh, remains suspended as directed by the Energy Regulatory Commission (ERC).

Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and FIT-All are all remitted to the government, the company said.

Meralco noted that its distribution charge has not moved since the 3.60-centavo per kWh reduction for a typical residential customer beginning August 2022. —VAL, GMA Integrated News