Meralco rates lower this month

Richmond Mercurio - The Philippine Star
Meralco rates lower this month
Meralco personnel confiscate illegal wiring connections in Barangay Paradise, Balot, Tondo, Manila on March 11, 20233.
STAR / Ernie Penaredondo

MANILA, Philippines — Lower generation charge pulled down rates of Manila Electric Co. (Meralco) this month, ending three consecutive months of increases.

Meralco, the largest electric power distribution company in the country, said overall electricity rate for a typical household is down by P0.7961 per kilowatt-hour this December, to P11.2584 from P12.0545 per kwh in November.

The downward adjustment is equivalent to a drop of around P159 in the total electricity bill of residential customers consuming 200 kwh, P239 for those consuming 300 kwh, P318 for 400 kwh, and P398 for 500 kwh.

Meralco attributed this month’s overall rate reduction primarily to lower generation charge, which is the largest component of the electric bill.

Generation charge for December declined by P0.6606 to P6.5332 from P7.1938 per kwh last month on the back of lower charges from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs).

Improved supply situation in the Luzon grid due to lower demand and decreased average plant capacity on outage resulted in a P2.7624 per kwh decrease in WESM charges. IPP charges likewise fell by P0.4731 per kwh due to First Gas plants’ reduced use of more expensive liquid fuel and lower international coal prices.

Meralco said peso appreciation, which affected around 97 percent of IPP costs that were dollar denominated, also contributed in the reduction of IPP charges.

Lower average power supply agreement dispatch, on the other hand, pushed PSA charges slightly higher by P0.0805 per kwh. PSAs accounted for 48 percent of Meralco’s total energy requirement for the period, followed by IPPs at 32 percent and WESM at 20 percent.

Meanwhile, transmission charge, taxes and other charges also registered a net reduction of P0.1355 per kwh.

Meralco said the collection of the feed-in tariff allowance at the rate of P0.0364 per kwh remains suspended, as directed by the Energy Regulatory Commission.

Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges and FIT-All are all remitted to the government.

On its end, Meralco’s distribution charge has not moved since the P0.0360 per kwh reduction for a typical residential customer beginning August 2022.

Citing a study conducted by the International Energy Consultants (IEC), Meralco said its rates “remain fair and reasonable.”

The IEC said Meralco’s average tariff in 2022 ranked 21st and three percent below the global average in its cross-country comparison of 46 energy markets, including two American states.

If subsidized markets were excluded, the IEC said Meralco’s tariff would even be 13 percent lower than the world average.

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