Meralco announced today, June 11, a decrease in overall electricity rates for June 2018, amounting to P0.1252 per kWh for a typical household.
The lower rate is mainly due to a P0.1556 per kWh decrease in generation and transmission charges, which more than offset a P0.0733 per kWh increase in the Feed-In Tariff Allowance (FIT-All). This is the second consecutive month of an overall rate decrease.
The adjustment this month brings down the overall rate to P9.8789 per kWh from May’s P10.0041 per kWh, equivalent to a decrease of around P25 in the bill of a residential customer consuming 200kWh.
Lower PSA charges bring down generation charge
From P5.0523 per kWh in May, the generation charge for this month will go down to P4.9828per kWh.
The reduction is the result of a P0.4420 per kWh decrease in the cost of power from Power Supply Agreements (PSAs), mainly due to higher dispatch of Pagbilao Unit 1 and Ilijan Unit 1 as both returned to normal operations after undergoing scheduled maintenance. The share of PSA purchases to Meralco’s total requirement this month was 45 percent.
Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs) increased by P0.1954 per kWh and P0.2266 per kWh, respectively. As demand for power in the Luzon grid grew by about 239 MW, charges from the WESM increased due to higher effective rates of line rentals. Higher IPP charges, on the other hand, were driven by the weakening of the peso against the US dollar.
Around 96 percent of IPP charges are dollar-denominated. The shares of WESM and IPP purchases to Meralco’s total requirement this month was 15 percent and 40 percent, respectively.
Meanwhile, the transmission charge to residential customers decreased by P0.0861per kWh due to lower NGCP Power Delivery and Ancillary Service Charges. With the lower generation and transmission charges, taxes and other charges also went down by P0.0429per kWh this month.
However, starting this month, the FIT-All rate will go up to P0.2563 per kWh, after the ERC recently approved an increase of P0.0733 per kWh on the previous rate. The FIT-All is a pass-through charge remitted to the National Transmission Corporation (TransCo) as an incentive for renewable energy (RE) developers, such as those operating wind, solar, biomass and run-of-river hydropower facilities.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 35 months, after these registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.
Energy efficiency tips
As summer ends, Meralco again reminds customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy, such as: unplugging appliances when not in use to avoid “phantom load;” using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency; using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously with just one switch; and maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance.
More helpful tips are at Meralco’s website at www.meralco.com.ph or its social media accounts, twitter @meralco and facebook at www.facebook.com/meralco.