The Manila Electric Co. (Meralco) announced on Tuesday its electricity rates for September will drop, primarily driven by the Philippine peso’s improved performance against the US dollar.
Joe Zaldarriaga, Meralco’s vice president and head of corporate communications, explained that a stronger peso reduces the dollar-denominated costs incurred by the company’s power suppliers.
This favorable foreign exchange rate has led to a lower generation charge, which is the cost of electricity that Meralco procures for its customers, Zaldarriaga said.
The reduction in these costs has “more than offset” the price adjustments from supplier SMC Global Power’s terminated contracts, the company added.
The Energy Regulatory Commission (ERC) had allowed SMC Global Power to begin recovering these costs this month.
Zaldarriaga expressed optimism that the lower generation charge would be enough to counteract any increases in other bill components.
The cost recovery by SMC Global, amounting to at least P34 billion, follows a Supreme Court decision last year. The ruling allowed SMC Global subsidiaries Sual Power Inc. and South Premiere Power Corp. to terminate their power supply agreements with Meralco due to a “change in circumstances.”
The ERC approved the cost recovery plan in March.
