Lower power rates in December

By Lenie Lectura - December 7, 2017

https://businessmirror.com.ph/lower-power-rates-in-december/

Power rates will go down this month to P9.2487 per kilowatt-hour (kWh) from last month’s P9.6272 per kWh, mainly on account of a P0.3035-per-kWh decrease in generation charge. The Manila Electric Co.  (Meralco) said on Thursday the P.3785-per-kWh decrease amounts to around P76 reduction in the total bill of a typical residential customer consuming 200 kWh.

The generation charge decreased from P4.9080 per kWh in November to P4.6045 per kWh this December, primarily due to the peso’s appreciation and lower Wholesale Electricity Spot Market (WESM) charges.

Despite a slight increase in the demand for power in Luzon in November, charges from the WESM decreased by P0.4658 per kWh.  The power-supply situation improved from October, when the grid experienced three instances of yellow alerts. The share of WESM purchases to Meralco’s total requirement this month was 12 percent.

Charges from independent power producers (IPPs) and power-supply agreements (PSAs) also registered decreases of P0.2191 per kWh and P0.3244 per kWh, respectively, mainly due to the strengthening of the peso against the United States  dollar. The peso-dollar exchange rate affects around 97 percent of IPP and 60 percent of PSA charges. IPPs and PSAs each provided 44 percent of Meralco’s total requirement.

Transmission charge of residential customers decreased by P0.0186 per kWh due to lower transmission wheeling and ancillary charges. Consequently, taxes and other charges also went down by P0.0564 per kWh this month.

Meralco’s distribution, supply  and metering charges, meanwhile, have remained unchanged for 29 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 National Grid Corp. of the Philippines.  Taxes and other public policy charges like the FiT-All are collected by the government.