Manila Electric Co. (Meralco) said February power rates will go down by P0.5900 per kilowatt hour (kWh) due to lower generation charges from power supply agreements (PSAs).
The second consecutive downward rate adjustment will be equivalent to a decrease of around P118 in the bill of a residential customer consuming 200 kWh monthly.
This also brings overall power rates to P8.8623 per kWh, its lowest level in two years compared to January’s P9.4523 per kWh.
The company said the back-to-back months of rate decrease to start the year total P1 per kWh, goes against the usual trend of February rates adjusting upward due to price normalization after reconciliation of outage allowances, as seen in the previous five years.
Meralco said from P4.9039 per kWh last month, generation charge for February decreased to P4.5090 per kWh, a reduction of P0.3949 per kWh.
The new baseload PSAs with San Miguel Energy Corp., South Premiere Power Corp. and AC Energy registered a significantly lower generation cost of P4.0372 per kWh average
The said PSAs started to be implemented last December 26 and were secured after a successful competitive selection process under the guidance of the Depart
ment of Energy (DOE) and the provisional approval of the Energy Regulatory Commission (ERC).
Charges from the Wholesale Electricity Spot Market (WESM) also decreased this month, driven by lower power demand and improved supply conditions in the Luzon grid as it stabilized at P3.0529 per kWh.
The lower charges from PSAs and WESM offset the increased cost of power from Meralco’s independent power producers (IPPs) and old PSAs, which moved up by P0.7429 per kWh to P5.2920 per kWh, mainly due to lower average plant dispatch resulting from the scheduled outage of Quezon Power and First NatGas-San Gabriel.
Meanwhile, taxes and other charges registered a decrease of P0.2839 per kWh as the Feed-In-Tariff Allowance (FIT-All) went down by P0.1731 per kWh after the ERC approved a lower FIT-All rate of P0.0495 per kWh as compared with the previous subsidy of P0.2226 per kWh.
A P0.0543 per kWh reduction in the Universal Charge after the Power Sector Assets and Liabilities Management Corp. said that it completed the collection of National Power Corp.’s stranded contract cost recovery also helped in the overall reduction of power rates.
However, a P0.0888 per kWh increase in the transmission charge for residential customers was recorded a result of higher ancillary service charges from the National Grid Corporation of the Philippines (NGCP).
Meralco’s interim distribution rates comprised of distribution, supply and metering charges, the only bill component paid to the company remained at P1.381 per kWh for 55 months already.
Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP while taxes and other public policy charges like the FIT-All are collected by government.
Meralco said of the total power requirements for the month, 23 percent was from WESM; 21 percent, new PSAs and; 56 percent from IPPs and old PSAs.
Laban Konsyumer Inc. welcomed Meralco’s implementation of lower power rates for the month saying the DOE and ERC finally acted on the new PSAs that resulted from the successful Meralco CSP last year.
LKI said these new PSAs were able to bring down power prices and the generation charge bill component significantly, to the great benefit of consumers.
