MANILA, Philippines — Rates of the Manila Electric Co. (Meralco) are down slightly this February after three consecutive months of increases, as lower generation charge has more than offset the impact of a distribution refund completion.
Meralco said the overall rate for a typical household this month is lower by P0.0106 per kilowatt-hour to P10.8895 per kWh from January’s P10.9001 per kWh.
The adjustment is equivalent to a reduction of around P2.13 in this month’s power bills for residential customers consuming 200 kWh, P2.71 for those consuming 300 kWh, P3.04 for 400 kWh and P2.39 for 500 kWh.
“It’s at least a pleasant situation for consumers, given that we were perhaps initially expecting an upward adjustment given that the refund has been completed. But the lower generation costs more than made up for it and that is why we are experiencing a lower electricity bill for consumers for February,” Meralco vice president and head of corporate communications Joe Zaldarriaga said at a briefing yesterday.
Meralco saw its generation charge drop by P0.2137 to P6.9154 per kWh due to lower costs from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs).
The decline in WESM charges was attributed to the improved supply situation in the Luzon grid with less generation capacity on outage, lower demand and absence of yellow alerts.
IPP charges also went down as a result of the First Gas plants’ reduced use of more expensive alternative fuel and lower natural gas prices after the quarterly repricing of Malampaya gas that reflected recent trend in international crude oil prices.
Meralco said the continued appreciation of the peso, which affected 95 percent of IPP costs that are dollar-denominated, also contributed to the reduction.
Charges from power supply agreements (PSAs), however, increased by P0.7970 per kWh due to lower average plant dispatch.
PSAs provided 47 percent Meralco’s total energy requirement for the period, followed by IPPs at 37 percent and WESM at 16 percent.
Meralco said reduction in the generation charge offset the impact of the completion of the third of four distribution-related refunds, equivalent to P0.1923 per kWh for residential customers.
The refund is no longer reflected in the customers’ electric bills starting this month.
Meralco said the remaining distribution-related refund equivalent to P0.8656 per kWh for residential customers continues to temper the monthly bills.
The last refund is set to be completed by May, the impact of which will be felt in the succeeding month.
Meralco’s distribution charge, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer starting August last year.
All other charges, including transmission charge and taxes, registered a slight net increase of P0.0108 per kWh.
Collection of the feed-in tariff allowance (FIT-All) remains suspended following the issuance of the Energy Regulatory Commission’s resolution halting the collection of P0.0364 per kWh FIT-All rate for three months from December 2022 to February 2023.
Meralco said pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges and FIT-All are all remitted to the government.
“Historically, once the summer months kick in, that is when demand starts to rise and historically once that occurs, then there is really pressure for prices to go up as well,” Zaldarriaga said.
“So we need to see what are the factors that will eventually come into play for the billing month of March. Historically, once March comes in, April, May, June, we will see the rise in demand,” he added.