Household consumers should expect higher electricity bills this month as energy utility provider Manila Electric Co. (Meralco) increased rates by P0.4621 per kilowatt hour, to P11.4139 per kWh from P10.9518 per kWh last month.

The increase is attributed to higher generation charge due to higher costs from the Wholesale Electricity Spot Market (WESM) and existing power supply agreements (PSAs).

Meralco vice president and head of corporate communications Joe Zaldarriaga said they had to source energy from the spot market, as the existing PSAs were not enough to address the lack of power supply.

'As you know, the supply situation in April was challenged, not only on our side but the entire grid. So, if we did not resort to the spot market, we would have had a shortage in the energy supply,' Zaldarriaga said at a press conference on Tuesday.

'It really is the demand situation and the supply capability as well,' he added.

Charges from the spot market hiked by P1.7913 per kWh following tight supply in the Luzon grid, which was placed on red and yellow alert several times since April 16. Likewise, demand increased by 2,401 megawatts (MW).

At the same time, charges from PSAs went up by P0.2871 per kWh because of lower excess energy deliveries of some agreements, as well as charges from emergency PSAs.

Peso depreciation also took part in the increase as 14 percent of PSA costs were dollar-denominated.

'Tempering the increase in the generation charge was the P0.6942 per kWh reduction in charges from Independent Power Producers (IPPs) due to higher average IPP dispatch and lower fuel prices,' Meralco said.

WESM, PSAs and IPPs accounted for 30 percent, 36 percent and 34 percent, respectively, of Meralco's total energy requirement.

Meanwhile, transmission charge, taxes and other charges also increased by P0.0166 per kWh.

The increase this month was forecasted earlier by Meralco, citing increased power demand and jumped costs from the spot market.

Last month, Meralco dropped electricity rates by P0.9879 per kWh, marking the first decrease this year. This brought the overall rate for regular households to go down to P10.9518 per kWh from P11.9397 per kWh in March.

In a Tuesday advisory, the National Grid Corp. of the Philippines said the Luzon grid is on yellow alert with an available capacity of 14,963 MW amid peak demand of 13,871 MW.

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