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High oil prices, weak peso push Meralco rates upward

By Kris Crismundo

September 8, 2022, 2:50 pm

<p><em>File photo</em></p>

File photo

MANILA – Power rates in franchise areas of the country’s largest distribution utility, Manila Electric Co. (Meralco), will increase in September mainly due to higher fuel cost and peso depreciation.
 
On Tuesday, Meralco announced that it will increase electricity rates by PHP0.3907 per kilowatt hour, raising rates to PHP9.9365 per kWh from PHP9.5458 per kWh last month.
 
“The ongoing Malampaya gas supply restriction necessitated the increased use of more expensive alternative fuel by First Gas Sta. Rita and San Lorenzo to ensure continuous supply,” the firm said in a statement.
 
It added the weaker peso increased charges from independent power producers (IPPs) and power supply agreements (PSAs), wherein 98 percent of total IPP costs and 36 percent of PSA costs are dollar-dominated.
 
Just this week, the Philippine peso hit an all-time low, touching the PHP57 level against a dollar.
 
On the other hand, lower Wholesale Electricity Spot Market (WESM) offset the higher IPP and PSA costs with the improvement in the power supply in the Luzon grid. 
 
Meralco said the reduction in WESM charges is at PHP3.7473 per kWh.
 
Transmission charges for residential customers this month also declined by PHP0.0432, while taxes and other charges had a net increase of PHP0.0758 per kWh. (PNA)
 

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