MANILA, Philippines — Consumers reeling from stubbornly high inflation may get some reprieve this month after Manila Electric Co. (Meralco) slashed its power rate.
In a statement on Monday, the largest power distributor in the country said the reduction in the electricity rate in July was due to an order from the Energy Regulatory Commission to Meralco to refund distribution-related charges amounting to P21.8 billion to customers.
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The adjustment, in turn, cut the overall rate by P0.7067 per kWh to P9.7545 per kWh.
This means a typical household consuming 200 kWh per month will get an estimated P141 decrease in their power bill this month. The power distributor said the reduction was large enough to “effectively reverse” all the rate increases since the start of the year.
The refund stemmed from ERC’s review of the rate components that can be adjusted under the existing rules. Regulators said Meralco must give the refund to its customers for a period of 12 months or until the amount is fully distributed.
And this is the ERC’s fourth refund directive to Meralco since January last year. Including the latest order, the updated total refund for residential consumers is now at P1.8009 per kWh.
But while the new round of refund is expected to ease the burden of consumers grappling with rising prices, some customers are already bracing for the implementation of a Supreme Court ruling upholding a 2013 approved rate hike application by Meralco.
“The immediate implementation of the ERC Decision was able to more than offset the impact of higher generation charge this month to the benefit of our customers,” Jose Ronald Valles, company head of regulatory management, said.
Broken down, charges from the spot market climbed by P3.9649 per kWh owing to tight supply conditions in Luzon following several plant outages. This month, Meralco sourced 7% of power it sold to consumers from the spot market, where distributors can buy electricity at prices that are higher than pre-agreed supply deals in times of energy crunch.
Likewise, charges by power supply agreements (PSA), which accounted for 50% of Meralco’s energy requirement in July, grew by P0.3186 per kWh, no thanks to a falling peso that made 32% of dollar-denominated PSA costs more expensive. The continued increase in international coal prices also contributed to the increase in the PSA rate.
The increase in spot market and PSA prices offset a P0.4669-per-kWh decrease in charges from independent power producers, where Meralco got 43% of energy it distributed to its franchise area.
Transmission charges inched down by P0.0012 per kWh, while taxes and other charges lowered to P0.0565 per kWh.