Meralco rates lower this month

MANILA, Philippines — Manila Electric Co. (Meralco) announced yesterday its customers would see lower electricity bills this month due to lower generation charge, after the power distributor invoked force majeure claims.

Meralco said the overall rate for a typical household decreased by P0.2483 per kilowatt-hour – from last month’s P8.9951 per kwh – to P8.7468 per kwh this month.

The rate reduction is equivalent to a reduction of around P50 in the total bill of residential customers consuming 200 kwh.

Meralco attributed the lower rates to the decrease in generation charge, the electricity bill’s biggest component, which decreased by P0.2537 per kwh to P4.3848 per kwh.

“Because of the very significant reduction in power demand in its service area during the enhanced community quarantine period, Meralco invoked the force majeure provision in its Power Supply Agreements (PSA) for the duration of the lockdown, reducing fixed charges for generation capacity that would have been charged by suppliers,” it said.

In particular, the power distributor said April’s generation charge reflected a P129-million reduction in fixed costs due to Meralco’s force majeure claim.

For this month, the force majeure claim totaled P877 million, equivalent to savings of P0.3452 per kwh. This represented reduction in fixed costs and avoided charges from the temporary suspension of the mid-merit supply contracts recently approved by the Energy Regulatory Commission (ERC).

For both months, the force majeure claim totaled more than P1 billion, Meralco said. This drove PSA charges to drop by P0.2116 per kwh.

The cost of power from Independent Power Producers (IPPs) also decreased by P0.6418 per kwh due to higher average plant dispatch, lower fuel prices and peso appreciation.

PSAs and IPPs accounted for 52 percent and 46 percent of total supply, respectively.

Charges from the Wholesale Electricity Spot Market (WESM) increased by P1.8502 per kwh due to the included line rentals related to Meralco’s supply contracts. The share of WESM to Meralco’s supply needs was less than two percent.

Meanwhile, Meralco said there was no movement for the Feed-In-Tariff Allowance (FIT-All) for this month as the ERC ordered another month of deferral of the FIT-All in consideration of the current quarantine.