Manila Electric Co. (Meralco) said January power rates will go down by P0.4100 per kilowatt hour (kWh) due to lower charges from power supply agreements (PSAs).
The downward rate adjustment will be equivalent to a decrease of around P82 in the bill of a residential customer consuming 200 kWh monthly. It brings overall power rates to P9.4523 per kWh from December’s P9.8623 per kWh.
The rate drop follows three consecutive months of upward adjustments.
Meralco said from P5.1967 per kWh last month, generation charge for January dropped P0.2928 per kWh to P4.9039 per kWh, due to a P0.8659 per kWh reduction in the cost of power from PSAs.
“Lower PSA charges were 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. The early completion of annual capacity payment for Sual unit 1, Ilijan, Pagbilao unit 1 and Panay Energy resulted in savings immediately passed on to consumers by way of lower electricity rates,” Joe Zaldarriaga, Meralco public information office head, said in a statement.
Another factor that contributed to the lower rates this month is the lower cost of power from independent power producers (IPPs) by P0.0634 per kWh due to improved dispatch and strengthening of the peso against the US dollar. Around 96 percent of IPP costs are dollar denominated.
However, charges from the Wholesale Electricity Spot Market (WESM) rose by P1.7031 per kWh driven by tighter supply conditions in the Luzon grid as the National Grid Corporation of the Philippines (NGCP) placed it under Yellow Alert from November 26 to 28 and on December 16 due to forced and scheduled outages of various power plants.
The Luzon grid was also placed on Red Alert on December 3 due to limited availability of plants in Batangas and Quezon because of Typhoon Tisoy.
The transmission charge for residential customers decreased by P0.0517 per kWh as a result of lower NGCP ancillary service charges, as taxes and other charges also dropped by P0.0656 per kWh.
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 the past 54 months.
Payment for the generation charge goes to the power suppliers while payment for the transmission charge goes to NGCP. Taxes and other public policy charges like the feed-in-tariff allowance are collected by government.
Of its total power requirements for the month, Meralco said 9.4 percent was from WESM, 41.2 percent from IPPs and 49.4 percent from power plants under PSAs.
Meanwhile, Sen. Sherwin Gatchalian is pressing for the immediate issuance of the Implementing Rules and Regulation (IRR) for the Murang Kuryente Act, saying the delay denies the country of having cheap electricity.
The law, which was created to make electricity more affordable to consumers by removing the National Power Corp.’s Universal Charge for Stranded Debts and Universal Charge for Stranded Contract Costs that are passed on to consumers and reflected in the monthly electricity bill, has yet to be implemented due to absence of the IRR.
Gatchalian, Senate committee on energy chairman, said those consuming 200 kWh per month can save P172 per month or P2,064 annually, once the law is implemented.
He added the law should have taken effect by December last year as an IRR should have been issued last November 27, 90 days after the effectivity of the law.