The Manila Electric Company (MERALCO) announced today the third consecutive month of lower power rates, as overall electricity rates for a typical household consuming 200kWh decreased to P9.9850 per kWh this July from last month’s P10.0918 per kWh. The downward adjustment of P0.1068 per kWh will mean a decrease of around P21 in the total bill. The third straight month of electricity rate decrease represents a total downward adjustment of around P0.57 per kWh since May 2019.
Lower IPPs charges offset increase in WESM, stabilizing generation charge
From P5.4158 per kWh last month, generation charge for July slightly went up to P5.4227 per kWh, a slight increase of only P0.0069 per kWh.
The slight generation charge increase is primarily due to higher charges from the Wholesale Electricity Spot Market (WESM), but was mostly offset by the lower charges of Independent Power Producers (IPPs) and stable charges of Power Supply Agreements (PSAs).
WESM charges increased by P1.8794 per kWh due to tight supply conditions in the Luzon grid. Plant capacity on outage increased as demand for power in the grid peaked at 11,344 MW in June. With limited supply, the number of days on Red Alert as declared by the National Grid Corporation of the Philippines (NGCP) increased to 5 from 2 in May and about one-third of the days in June were under Yellow Alert. The share of WESM to Meralco’s supply needs went down to 8.1%.
On the other hand, cost of power from IPPs decreased by P0.2239 per kWh largely due to Peso appreciation. About 97% of IPP charges are dollar-denominated. Cost of power from PSAs is stable with a slight increase of P0.0414 per kWh. IPPs and PSAs provided 41.4% and 50.5% of Meralco’s supply needs, respectively.
Reduction in Transmission and Other charges
The overall reduction this month was mainly brought about by a lower Transmission charge for residential customers, which decreased by P0.0788 per kWh, primarily due to lower Ancillary Service Charges. Taxes and other charges also decreased by P0.0349 per kWh. This includes a reduction of P0.0731 per kWh, in compliance with the ERC’s directive to implement a one-time decrease in rates for reset cost adjustment and reflect the same as a separate line item in electric bills. This month’s rate also includes an increase in the Universal Charge-Stranded Contract Cost amounting to P0.0543 per kWh to be recovered for twelve (12) months, which was recently approved by the ERC
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 48 months, after these registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.
Meralco provides energy efficiency tips for customers
Meralco encourages its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy, such as: (i) unplugging appliances when not in use to avoid “phantom load”, (ii) using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency, (iii) using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously with just one switch, and (iv) maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance. For more helpful tips, customers may visit Meralco’s website at www.meralco.com.ph or its social media accounts, twitter @meralco and facebook at www.facebook.com/meralco.
