Meralco cuts rates for April

MANILA, Philippines — Following an increase last month, rates of the Manila Electric Co. (Meralco) are down by almost 12 centavos per kilowatt hour (kwh) this April as a result of lower generation charge.

Meralco said the overall rate for a typical household this month is lower by P0.1180 per kwh to P11.3168 per kwh from last month’s P11.4348 per kwh.

The adjustment is equivalent to a reduction of around P24 in this month’s power bills for residential customers consuming 200 kwh, P35 for those consuming 300 kwh, P47 for 400 kwh and P59 for 500 kwh.

“Initially, we thought that there would be a pressure for prices to go up this month because of the 20 centavos deferred cost,” Meralco vice president and head of corporate communications Joe Zaldarriaga said at a briefing yesterday.

“However, it so happened that there was a big reduction in spot market prices and at the same time, the peso appreciated vis-à-vis the US dollar,” he said.

Even with the collection of the first installment of deferred generation costs equivalent to around P0.20 per kwh this April billing period, Meralco said the generation charge declined to P7.3295 per kwh from P7.3790 per kwh.

Meralco last month coordinated with its suppliers and the Energy Regulatory Commission (ERC) to make a staggered collection of around P1.1 billion in March generation costs to cushion the impact of the rate increase on customers.

As such, P0.40 per kwh would be billed on a staggered basis over a two-month period, or P0.20 per kwh each in April and May.

The effect of the collection of the first installment, however, was more than offset by lower costs from the Wholesale Electricity Spot Market (WESM) and Meralco’s power supply agreements (PSAs) for the April billing period.

Meralco said WESM charges dropped by P1.0462 per kwh due to improved supply situation in the Luzon grid.

A total of 32 percent of the power distributor’s total requirement was sourced from the spot market, compared to 22 percent the previous month.

Charges from PSAs, which accounted for 41 percent of Meralco’s energy requirement for the period, also went down by P0.0741 per kwh due to peso appreciation.

Charges from independent power producers (IPPs), on the other hand, increased by P0.6710 per kwh following the collection of the first installment of deferred generation costs.

Meralco said higher IPP rate was mitigated by the significant reduction in the use of more expensive alternative fuel by the First Gas plants and the stronger peso against US dollar.

IPPs covered 27 percent of Meralco’s total energy requirement for the period.

Meanwhile, Meralco reported that all other charges, including transmission charge, taxes and subsidies, registered a net reduction of P0.0685 per kwh.

Meralco’s distribution charge has remained the same since the P0.0360 per kwh reduction for a typical residential customer in August 2022.

Meralco is still implementing one distribution-related refund equivalent to P0.8656 per kwh for residential customers, which continues to temper monthly bills.

The company said the final refund is expected by May 2023, impact of which would be felt the succeeding month.

Meanwhile, Meralco revealed that the ERC last April 4 formally endorsed the official list of beneficiaries of the lifeline discount in accordance with Republic Act No. 11552, or “An Act Extending and Enhancing the Implementation of the Lifeline Rate, Amending for the Purpose Section 73 of Republic Act 9136 (Electric Power Industry Reform Act of 2021).”