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Meralco rates down for 2nd straight month

Richmond Mercurio - The Philippine Star
Meralco rates down for 2nd straight month
Joe Zaldarriaga, Meralco vice president and head of corporate communications, said at a briefing yesterday that the overall rate for a typical household went down by P0.2087 this month to P9.5458 per kilowatt-hour from last month’s P9.7545 per kWh.
Boy Santos / File

MANILA, Philippines — Meralco rates are down for the second consecutive month due to lower generation and distribution charges.

Joe Zaldarriaga, Meralco vice president and head of corporate communications, said at a briefing yesterday that the overall rate for a typical household went down by P0.2087 this month to P9.5458 per kilowatt-hour from last month’s P9.7545 per kWh.

This is equivalent to a decrease of around P42 in the total bill of a residential customer consuming 200 kWh, P65 for 300 kWh, P89 for 400 kWh and P117 for 500 kWh.

The adjustment has likewise resulted in a combined reduction of P0.9154 per kWh over the past two months and a net decrease of P0.2315 per kWh since the start of the year.

“The drivers are basically the lower generation and distribution costs, despite the slight uptick in transmission. This is the second straight month, so hopefully this is good news for our customers,” Zaldarriaga said.

Meralco said the generation charge for this month declined by P0.1944 to P6.5812 per kWh from P6.7756 per kWh last month due to the decrease in charges from power supply agreements (PSAs), which more than offset increases in charges from independent power producers (IPP) and the Wholesale Electricity Spot Market (WESM).

A reduction of P0.4273 per kWh for PSA charges was registered, as this month’s rate no longer included recovery of deferred generation costs for the April bill.

Meralco said higher excess energy of some PSAs, which are priced at discount, also contributed to the decrease.

IPP charges, on the other hand, grew by P0.4213 per kWh with the continued rise in international fuel prices.

According to Meralco, the underlying Malampaya natural gas price increased by 15 percent starting this quarter, reflecting recent spikes in world crude oil prices.

It said power suppliers that have pass-through adjustments in Malampaya fuel – First Gas-Sta. Rita, First Gas-San Lorenzo and First Natgas-San Gabriel – accounted for 44 percent of the company’s supply during the period.

Reduced use of more expensive alternative fuel by First Gas plants also mitigated further increase in IPP charges, Meralco said.

Charges from the WESM, meanwhile, remained high, registering an increase of P0.0433 per kWh due to tight supply conditions in the Luzon grid.

Meralco said persistently high spot market prices likewise triggered the imposition of the secondary price cap almost 27 percent of the time.

Overall, PSAs accounted for 52 percent of Meralco’s energy requirement for the period, while IPPs and WESM accounted for 43 percent and five percent, respectively.

Meralco said the implementation of distribution-related refunds totaling P48.3 billion as ordered by the Energy Regulatory Commission (ERC) continues to temper customers’ monthly bills.

Also contributing to the overall rate reduction for August was the decline in Meralco’s distribution charge, equivalent to P0.0360 per kWh for typical residential customers.

This comes following the ERC decision last June reducing the final average distribution rate for the lapsed period (July 2015 to June 2022) from P1.3810 to P1.3522 per kWh, to be reflected as lower distribution, supply and metering charges for all Meralco customers beginning this month.

Transmission charge for residential customers saw an increase of P0.0235 per kWh, while taxes and other charges registered a net decrease of P0.0018 per kWh.

Meralco said collection of P0.0025 per kWh representing the Universal Charge-Environmental Charge remains suspended as ordered by the ERC.

The power distributor reiterated that pass-through charges from generation and transmission are paid to the power suppliers and the system operator, respectively, while taxes, universal charges and Feed-in Tariff Allowance are all remitted to the government.

“Next month will be another story depending on factors that come into play. But we in Meralco, we strive to find a way to somehow get the least cost possible for our consumers,” Zaldarriaga said.

MERALCO

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