Meralco electricity rates to dip in May

By Lenie Lectura- May 8, 2019

https://businessmirror.com.ph/2019/05/08/meralco-electricity-rates-to-dip-in-may/

ELECTRICITY rates of Manila Electric Co. (Meralco) customers for the month of May will go down to P10.2866 per kilowatt hour (kWh).

From April’s P10.5594 per kWh, overall electricity rates went down to P0.2728 per kWh. This is a decrease of around P55 in the total bill of a typical household consuming 200 kWh.

Meralco reported on Tuesday that lower charges from the independent power producers (IPPs) and power-supply agreements (PSAs) brought down generation charge to P5.5508 per kWh, a decrease of P0.0814 per kWh from P5.6322 per kWh last month.

Cost of power from IPPs and PSAs decreased by P0.7544 per kWh and P0.5143 per kWh, respectively, in May due to the strengthening of the peso against the US dollar and lower fuel prices.

About 98 percent of IPP charges and 72 percent of PSA charges are dollar-denominated.

The price of natural gas from Malampaya, which accounts for about 64 percent of Meralco’s supply, decreased this month as a result of quarterly repricing to reflect lower crude oil prices in the world market. IPPs and PSAs provided 43 percent and 45 percent of Meralco’s supply needs, respectively.

Meanwhile, charges from the Wholesale Electricity Spot Market increased by P3.5355 per kWh because of tight supply conditions in Luzon, resulting in seven instances of Yellow Alerts and seven instances of Red Alerts declared by the National Grid Corp. of the Philippines (NGCP) during the supply month. WESM provided 12 percent of Meralco’s supply needs.

Transmission charge for residential customers decreased by P0.0808 per kWh due to higher system load factor. Taxes and other charges also decreased by P0.1106 per kWh.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 46 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.