Meralco customers beating the heat to see March bills fall

Prinz Magtulis (Philstar.com) - March 9, 2021 - 1:50pm
https://www.philstar.com/business/2021/03/09/2083103/meralco-customers-beating-heat-see-march-bills-fall

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) beating the heat with their air-conditioning units can heave a sigh of relief about their bills as the country's largest power distributor enforces a refund that will lower electricity rates.

Power bills of typical residences consuming 200 kilowatt per hour will go down “around P72” in March, Meralco said in a statement on Tuesday.

The deduction will come from a downward adjustment in overall rates by P0.3598 per kWh to P8.3195 per kWh, the lowest since August 2017. This month’s decrease followed a smaller rate cut in February, and an increase in January.

Lower Meralco rates will help offset costs likely to come from higher energy consumption that typically comes with the dry season and prompts the air-con to go full blast. By Meralco's estimates, residential power demand rise between 10% and 40% during this period.

More broadly, the reprieve from cheaper electricity is a relief for households reeling over rising prices of basic goods and services. Over the past 2 months, inflation have gone beyond the rate considered sustainable by the central bank, and monetary authorities project the pain from expensive commodities is just about to get harsher.

According to Meralco, power costs will decline this month as P13.9 billion in refunds ordered by the Energy Regulatory Commission last month are credited to households. That alone will cut P0.2761 per kWh in March and will be reflected as a line item named “Dist True-Up” in customer bills.

Refunds represented excess collections from Meralco’s actual weighted average tariff from July 2015 to November 2020. Meralco itself petitioned for the refund before ERC, because the latter's interim average rate was lower than utility firm’s own levies.

In addition, power rates will also get pushed down by another set of over-recoveries from January 2017 to December 2019, which started to be reflected in Meralco bills last January.

Generation charges are also decreasing by P0.0403 per kWh in March due to cheaper power, hence contributing to the overall drop. The price of electricity sourced from the Wholesale Electricity Spot Market (WESM) have dropped just when Meralco was getting a larger share of supplies from it.

On top of these savings, collection of universal and environmental charges worth P0.0025 per kWh have also remained suspended by regulators for months now. All these reductions way offset a slight increase in transmission charges by P0.0022 per kWh in March, resulting in a net decrease in utility bills this month.

Following state directives to help cushion the pandemic's impact on consumers, power disconnections are also suspended until March 31 for unpaid duties of consumers of 200 kWh and below.

Shares in Meralco closed up 0.73% to P277.20 each on Tuesday.