January Meralco rates to go down

January 9, 2020 | 12:31 am

https://www.bworldonline.com/january-meralco-rates-to-go-down/

HOUSEHOLDS in Metro Manila can expect a decrease in their electricity bills in the first month of 2020, with typical households set to see a reduction of P82, the Philippine capital’s largest power distribution utility said on Wednesday.

Manila Electric Co. (Meralco) in a statement said the overall electricity rate will drop by P0.41 per kilowatt-hour (kWh) to P9.4523 per kWh in January, from last month’s P9.8623 per kWh.

Those consuming 200 kWh — who make up the largest residential customer segment — will see their bills reduced by P82.

Those using 300 kWh, 400 kWh and 500 kWh can expect their monthly bill to go down by P123, P164 and P205, respectively.

“Notably, this month’s overall rate is also P0.3862 per kWh lower than the January 2019 rate of P9.8385 per kWh,” the company said.

Meralco said lower costs under the utility’s power supply agreements (PSA) with generation companies brought down the generation charge for the month.

Joe R. Zaldarriaga, head of Meralco’s public information office, said the lower PSA charges was “brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission.”

He said the early completion of the annual capacity payment for unit 1 of the Sual power plant and unit 1 of the Pagbilao plant, along with Panay Energy Development Corp. resulted in savings immediately passed on to consumers through lower electricity rates.

For January, the generation charge dropped to P4.9039 per kWh, or down by P0.2928 per kWh from P5.1967 per kWh last month.

Meralco said the decrease was mainly because of a P0.8659 per kWh reduction in the cost of power from the company’s PSAs, which accounted for 49.9% of its total requirement this month.

The cost of power from independent power producers (IPPs) also went down by P0.0634 per kWh with the improved dispatch and strengthening of the peso against the US dollar. The company said about 96% of IPP costs are dollar-denominated. IPPs made up 41.2% of the utility’s energy requirements for the period.

In contrast, charges from the Wholesale Electricity SpotMarket (WESM) rose by P1.7031 per kWh because of the tighter supply conditions in Luzon.

Last month, grid operator National Grid Corporation of the Philippines (NGCP) placed Luzon on red alert on Dec. 3 after the limited availability of power plants in Batangas and Quezon provinces because of Typhoon Tisoy.

On Dec. 16, the Luzon grid was placed on yellow alert because of forced and scheduled outages of some power plants. These were the same reasons for the same alert issuances on Nov. 26 and 28.

NGCP issues the alert warnings when reserve power supply goes down. When supply thins the utility turns to WESM, which accounted for 9.4% of Meralco’s needs.

Meanwhile, the transmission charge for residential customers dropped by P0.0517 per kWh as a result of lower NGCP ancillary service charges. Taxes and other charges also decreased by P0.0656 per kWh.

Meralco said its distribution, supply, and metering charges had been unchanged for 54 months, after these recorded reductions in July 2015. It 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,” it said, adding that taxes and other public policy charges such as the universal charges and the feed-in tariff allowance are remitted to the government.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon