Meralco cuts power rates this month

MANILA, Philippines —  Rates of Manila Electric Co. (Meralco) are down for the second month this August as the generation charge, which accounts for more than half of the electric rate, has further declined.

Meralco said the overall rate for a typical household this month is lower by P0.2908 to P10.8991 per kilowatt-hour from P11.1899 per kwh in July.

The adjustment is equivalent to a reduction of around P58 in the total electricity bill of residential customers consuming 200 kwh, P87 for those consuming 300 kwh, P116 for 400 kwh and P145 for 500 kwh.

With this month’s downward adjustment, the combined reduction over the past two months in Meralco rates now stands at P1.0121 per kwh.

Meralco said the generation charge in the July supply month registered a decline for the third consecutive month, dropping by P0.2137 to P6.3929 per kwh.

Meralco saw charges from the Wholesale Electricity Spot Market (WESM) drop by P1.2873 per kwh as average demand in the Luzon grid fell by more than 200 megawatts (MW).

“The lower demand was mainly the effect of the rainy season. In the spot market, once demand goes down, prices drop as well,” Meralco vice president and head of utility economics department Lawrence Fernandez said.

Charges from power supply agreements (PSA) likewise saw a P0.1688 per kwh reduction due to lower fuel prices and the peso’s appreciation, which affected around 26 percent of PSA charges that are dollar denominated.

Meralco said the reductions in WESM and PSA charges offset a slight P0.0853 per kwh increase in charges from independent power producers (IPPs).

IPP charges went up as a result of lower average IPP dispatch as several units of First Gas-Sta. Rita and First Gas-San Lorenzo underwent scheduled outage during the July supply month.

Mitigating the impact of reduced dispatch was the decrease in the price of Malampaya natural gas following its quarterly repricing, and the peso appreciation that affected around 97 percent of dollar-denominated IPP charges.

For the July supply month, PSAs accounted for 47 percent of Meralco’s total energy requirement, while IPPs covered 36 percent.

Meralco also sourced around 17 percent of its total energy requirement from WESM during the period.

Meanwhile, transmission and other charges, which include taxes and subsidies, registered a net reduction of P0.0771.

Collection of the feed-in tariff allowance (FIT-All) at the rate of P0.0364 per kwh remains suspended until this August billing month as directed by the Energy Regulatory Commission.

Meralco’s distribution charge, for its part, has not moved since the P0.0360 per kwh reduction for a typical residential customer beginning August last year.