Meralco reduces January power rate by P0.27/kWh

By Lenie Lectura - January 12, 2017

http://www.businessmirror.com.ph/meralco-reduces-january-power-rate-by-p0-27kwh/

THE Manila Electric Co. (Meralco) announced on Thursday a rate reduction in January power bills by P0.2703 per kilowatt-hour (kWh), roughly P54 in the total electricity bill of a household with a monthly consumption of 200 kWh.

This month’s rate of P8.09 per kWh, the lowest since October 2009, is mainly due to the downward movement in the generation charge.

At P3.70 per kWh, the generation charge is P0.22 per kWh lower compared to January 2016’s P3.92 per kWh. Last month’s generation charge stood at P3.9351 per kWh.

The decrease resulted from the P0.59-per-kWh decrease in the cost of power supplied by power-supply agreement plants, mainly due to lower capacity charges of Pagbilao and Ilijan. This reduction in capacity fees is due to the annual reconciliation of outage allowances done at the end of each year under the contracts approved by the Energy Regulatory Commission (ERC). The capacity fees from these suppliers will normalize in the following month. The share of PSAs stood at 39.7 percent.

Meanwhile, the cost of power from independent power producers (IPPs) showed a slight reduction of P0.0005 per kWh. Improved dispatch of the First Gas-Santa Rita plant effectively offset the effects of the lower dispatch levels of Quezon Power and First Gas-San Lorenzo.  The share of the IPPs to Meralco’s total requirements for December 2016 was at 38.4 percent.

Overall charges from the Wholesale Electricity Spot Market (WESM) had a very minimal adjustment of P0.0267 per kWh, or from P2.5398 to P2.5665 per kWh. The share of WESM purchases to Meralco’s total requirements went down from 22.5 percent to 21.8 percent.

This month there was a slight increase in the transmission charge of residential customers by P0.0042 per kWh. But taxes and other charges decreased by a combined amount of around P0.0394 per kWh.

Meralco’s distribution, supply and metering charges have remained unchanged for 18 months, after these registered reductions in July 2015.

Meralco said 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.