The Manila Electric Company (MERALCO) announced the fourth consecutive month of lower power rates, as overall electricity rates for a typical household consuming 200kWh decreased to P9.5674 per kWh this August from last month’s P9.9850 per kWh. The downward adjustment of P0.4176 per kWh will mean a decrease of around P84 in the typical household’s total bill.
The fourth straight month of electricity rate decrease represents a total downward adjustment of almost P1 per kWh since May 2019.
Lower WESM charges lead to overall generation charge decrease
From P5.4227 per kWh last month, generation charge for August went down to P4.9620 per kWh, a decrease of P0.4607 per kWh.
The generation charge decrease is primarily due to lower charges from the Wholesale Electricity Spot Market (WESM).
WESM charges decreased by P6.208 per kWh due to improved supply conditions in the Luzon grid. While the National Grid Corporation of the Philippines (NGCP) placed Luzon on Yellow Alert in the first half of July, there was no Red Alert during the whole month. The share of WESM to Meralco’s supply needs went up to 11 percent.
On the other hand, cost of power from the Independent Power Producers (IPPs) increased by P0.0911 per kWh despite the strengthening of the peso against the US dollar and lower fuel prices as a result of quarterly repricing of Malampaya natural gas and continued decline in coal prices. Higher IPP costs were largely due to lower average plant dispatch with the scheduled maintenance of Sta. Rita Modules 20, 30 and 40 in July. This was offset as cost of power from the Power Supply Agreements (PSAs) decreased by P0.0656 per kWh due to lower fuel prices and peso appreciation. About 67 percent of PSA costs are dollar-denominated. IPPs and PSAs provided 41 percent and 48 percent of Meralco’s supply needs, respectively.
Increase in transmission and other charges
This month, transmission charge for residential customers increased by P0.0334 per kWh. Taxes and other charges also registered a slight increase of P0.0097 per kWh.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 49 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 provides energy efficiency tips for customers
Meralco 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.