Meralco cuts rates this month

MANILA, Philippines — The electricity rate of Manila Electric Co. (Meralco) will decrease this month, pulled down by lower capacity fees from its suppliers.

Meralco announced yesterday the decrease by P0.3418 per kilowatt-hour in December’s P10.1803 per kwh rate, bringing the rate to only P9.8385 per kwh this month.

The reduction translates to a P68.36 decrease to the monthly bill of a household that consumes 200 kwh; P102.54 for 300 kwh; P136.72 for 400 kwh and P170.90 for 500 kwh.

The power distributor attributed the decline to lower charges from its suppliers, which pulled down the generation charge. From P5.3303 per kwh last month, the generation charge for January went down by P0.4184 per kwh to P4.9119 per kwh.

Meralco said the decrease is mainly the result of a P1.2293 per kwh reduction in the cost of power from its power supply agreements. The share of PSAs to Meralco’s total requirement this month was at 40 percent.

“Lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission (ERC),” Meralco public information office head Joe Zaldarriaga said.

He said the early completion of annual capacity payment for Sual Unit 1, Ilijan, Pagbilao Unit 1 and Panay Energy Development Corp. resulted in savings immediately passed on to consumers by way of lower electricity rates.

“The capacity fees of PSAs will return to normal levels in January that will impact on February bills after the downward adjustment in December,” Zaldarriaga said.

Charges from the wholesale electricity spot market (WESM) also went down by P0.0165 per kwh due to improvement in the Luzon power situation, as the demand for power in the grid decreased by 101 megawatts.

Meanwhile, cost of power from the Independent Power Producers (IPP) went up by P0.0847 per kwh due to peso depreciation. About 92 percent of IPP charges are dollar-denominated. For the period, WESM and IPPs provided 18 percent and 42 percent of Meralco’s supply needs, respectively.

Also, the transmission charge for residential customers increased by P0.1210 per kwh this month due to higher ancillary services charges of the National Grid Corp. of the Philippines.

Taxes and other charges went down by P0.0444 per kwh this month.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 42 months, after these registered reductions in July 2015.