Power rates down by 45 centavos this month

MANILA, Philippines - Households in Metro Manila and nearby provinces will pay 45 centavos less per kilowatt-hour (kwh) this month for electricity on the back of lower power costs in February, Manila Electric Co. (Meralco), the country’s biggest power distributor, said yesterday.

The adjustment will translate to a P90 reduction in the electricity bills of a typical household consuming 200 kwh.

The drop in electricity rates stems from a 33-centavo per kwh decrease in the generation charge to P5.21 per kwh in March from P5.54 in February – the second straight month of reductions.

Meralco services around five million households in Metro Manila and outlying provinces.

Generation charges in December and January were at P9.10 per kwh and P10.23 per kwh, respectively.

“The decrease in generation charge was primarily driven by reductions in the cost of power sourced from plants selling to Meralco under Power Supply Agreements (PSA),” Meralco said. 

“Average cost of power under the PSAs decreased by 25 centavos per kwh to P4.57 per kwh from P4.81 per kwh. Meralco’s PSAs, which supplied 53 percent of Meralco’s requirements, remained the lowest cost source of supply,” it said.

Similarly, electricity sold by independent power producers (IPP) to Meralco, accounting for 43 percent of the company’s power requirements for the month, was 36 centavos per kwh less at P5.63 per kwh from P5.99.

The generation charge is the cost of power purchased by Meralco for the previous month’s supply. It accounts for 65 percent of the total electricity bill.

The cost of power from the Wholesale Electric Spot Market (WESM), the country’s trading floor for electricity, recorded the largest reduction at 51-centavo per kwh.

WESM charges went down to P4.90 per kwh in the February supply month from P5.41 during the January supply month as demand remained moderate and no major power plant outages were reported.

However, purchases from the WESM accounted for only four percent of Meralco’s requirements.

Other bill components – subsidy, system loss charge and universal charges – registered a reduction of 11 centavos per kwh, Meralco said.

On the other hand, transmission charge rose by four centavos per kwh but this was offset by a five-centavo per kwh reduction in value added tax (VAT) and local franchise tax. The distribution charge remained unchanged.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation charge. It said that generation charge payments go to the power suppliers such as the IPPs, the PSAs and the WESM.

Meralco’s distribution, supply, and metering charges account for only about 18 percent on the average of the total electricity bill, it added.

But with summer months approaching, Meralco is urging its customers to “manage their electricity consumption.”

“Appliances should be in tip-top condition so as to maximize their reliability and efficiency,” Meralco said. 

Rate hike pushed

But despite its announcement of lower bills this month, Meralco is seeking permission from the Energy Regulatory Commission (ERC) to charge its customers P5.33 per kwh more, party-list group Bayan Muna said yesterday.

Bayan Muna said this is higher than the P4.15-per kwh adjustment that the Supreme Court (SC) had stopped the distributor from implementing in December.

The group pointed out that possible collusion among power producers that led to the prohibited P4.15 rate adjustment could be the culprit behind Meralco’s petition for an even higher increase.

Meralco, through Therma Mobile, one of its power suppliers, forced up prices in WESM by offering electricity at the “fantastic” price of P62 per kwh, it added.                      

Bayan Muna urged ERC to delay its decision on the P5.33-per kwh rate increase petition until the SC resolves the case involving the P4.15 adjustment.  – With Jess Diaz