To start the new year, the Manila Electric Company (MERALCO) announced that overall electricity rates decreased to P9.8385 per kWh this month from last month’s P10.1803 per kWh. The downward adjustment of P0.3418 per kWh will mean a decrease of around P68 in the total bill of a typical household consuming 200kWh.
From P5.3303 per kWh last month, the generation charge for January went down to P4.9119 per kWh, a decrease of P0.4184 per kWh.
The decrease is mainly the result of a P1.2293 per kWh reduction in the cost of power from Meralco’s Power Supply Agreements (PSAs). The share of PSAs to Meralco’s total requirement this month was at 40 percent.
Meralco Public Information Office Head Joe Zaldarriaga said that “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 (ERC). The early completion of annual capacity payment for Sual Unit 1, Ilijan, Pagbilao Unit 1 and PEDC resulted in savings immediately passed on to consumers by way of lower electricity rates. The capacity fees of PSAs will return to normal levels in January that will impact on February bills after the downward adjustment in December.”
Charges from the Wholesale Electricity Spot Market (WESM) also went down by P0.0165 per kWh due to improvement in the Luzon power situation. The demand for power in the Luzon grid decreased by 101 MW. Meanwhile, cost of power from the Independent Power Producers (IPPs) went up by P0.0847 per kWh due to Peso depreciation. About 92 percent of IPP charges are dollar-denominated. WESM and IPPs provided 18 percent and 42 percent of Meralco’s supply needs, respectively.
Meanwhile, transmission charge of residential customers increased by P0.1210 per kWh this month due to higher NGCP Ancillary Services Charges. Taxes and other charges went down by PhP0.0444 per kWh this month.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 42 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.
Meralco once again encourages its 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: (i) unplugging appliances when not in use to avoid “phantom load”, (ii) using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency, (iii) 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 (iv) maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance.