By Lenie Lectura - June 7, 2018
The Manila Electric Co. (Meralco)
announced on Thursday a decrease in power rates this month mainly on account of
lower generation and transmission charges.
Overall electricity rates for June
stood at P9.8789 per kilowatt-hour, P0.1252 per kWh lower than the
previous month’s P10.0041 per kWh. The downward adjustment is equivalent to a
decrease of around P25 in the bill of a residential customer consuming 200 kWh.
This is the second consecutive month
of an overall rate decrease.
Generation charge, the largest
component of an electric bill, stood at P4.9828 per kWh, from P5.0523 per
kWh last month.
The reduction is the result of a
P0.4420 per kWh decrease in the cost of power from power supply agreements
(PSAs), mainly due to higher dispatch of Pagbilao Unit 1
and Ilijan Unit 1, as both returned to normal operations after
undergoing scheduled maintenance.
The share of PSA purchases
to Meralco’s total requirement this month was 45 percent.
Meanwhile, charges from
the Wholesale Electricity Spot Market (WESM) and Independent Power
Producers (IPPs) increased by P0.1954 per kWh and P0.2266 per kWh,
respectively.
As demand for power in the Luzon
grid grew by about 239 megawatt, charges from the WESM increased due to higher
effective rates of line rentals.
Higher IPP charges, on the other
hand, were driven by the weakening of the peso against the US dollar. Around 96
percent of IPP charges are dollar-denominated. The shares of WESM and IPP
purchases to Meralco’s total requirement this month was 15 percent
and 40 percent, respectively.
Transmission charge to residential
customers decreased by P0.0861 per kWh due to lower National Grid Corp. of the
Philippines’s (NGCP) Power Delivery and Ancillary Service Charges. With the
lower generation and transmission charges, taxes and other charges also went
down by P0.0429 per kWh this month.
However, starting this month, the feed-in-tariff
allowance (FiT-All) rate will go up to P0.2563 per kWh, after regulators
recently approved an increase of P0.0733 per kWh on the previous rate. The
FiT-All is a pass-through charge remitted to the National Transmission Corp. as
an incentive for renewable-energy developers, such as those operating
wind, solar, biomass and run-of-river hydropower facilities.
Meralco’s distribution, supply
and metering charges, meanwhile, have remained unchanged for 35 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.
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