October power bill lowest in five years

Business World Online
Posted on October 07, 2015 10:36:00 PM

CUSTOMERS of Manila Electric Co. (Meralco) could pay less this month for electricity they used in September, marking the sixth straight month of tariff decline -- to the lowest amount in more than five years -- mainly due to lower cost incurred by the utility from its suppliers.

The overall charge will go down by P0.13 per kilowatt-hour (/kWh) in October, Meralco said in a statement yesterday, adding: “This brings the total reduction to P2.26/kWh over the past six months.”

For this month, households consuming an average of 200 kWh per month -- which make up roughly three-fourths of Meralco’s customer base -- will pay P26.36 less. Those using 300 kWh, 400 kWh and 500 kWh will see P39.55, P52.73, and P65.91 bill reductions, respectively.

The October bill’s overall P8.42/kWh rate is the lowest since January 2010, Meralco said.

Subdued electricity tariff has constantly been cited by the government as a factor in the continued inflation slowdown to record-low levels. Electricity rates contribute 4.5% to the inflation basket, which tracks widely used goods to determine general price increase.

This month’s power rate cut was due largely to a reduction in generation charge, which reflects the cost of power sourced by Meralco from its suppliers. “The reduction in the overall rates was primarily due to the generation charge, which decreased by P0.14/kWh from last month,” it said.

This month’s generation charge stands at P3.996/kWh, which the utility said was also the lowest since January 2010.

Meralco said improved plant availability in the September supply month pulled down Wholesale Electricity Spot Market (WESM) charge by P3.71/kWh.

This offset the P0.08/kWh uptick in the rates from independent power producers (IPPs) and P0.18/kWh increase in the rates under its power supply agreements (PSAs) due to lower power dispatch by plants.

PSAs and IPPs each contributed 47% to Meralco’s total requirements for the last supply month, while WESM accounted for the 6% balance.

The generation charge accounts for 54% of total charges in Meralco’s electricity bill.

The rest consist of the distribution charge (18%), transmission charge (11%), system loss charge (5%), as well as taxes and other charges (12%).

Transmission charge edged up P0.01/kWh due to higher ancillary service charges, while taxes also went up by P0.01/kWh.

Other charges -- which include system loss charge and subsidies -- slipped by P0.01/kWh.

The distribution charge -- which last July fell by an average 11.26% -- was unchanged since this bill item is adjusted annually.

Meralco distributes electricity in Metro Manila, Bulacan, Cavite and Rizal, as well as parts of Batangas, Laguna, Quezon and Pampanga. -- Claire-Ann Marie C. Feliciano source