The Manila Electric Company (Meralco) on Friday announced a reduction of P0.0106 or P1.06 centavos per kilowatt-hour (kWh) for household electricity rates for February, bringing the overall rate for a typical household down to P10.8895 per kWh from the previous month’s P10.9001 per kWh.
The said reduction is equivalent to a decrease of P2.12 in the electricity bill for a typical household consuming 200 kWh.
Meralco Spokesperson Joe Zaldarriaga said that the lower rates to the decline in generation charge by 21.37 centavos to P6.9154 per kWh from P7.1291 per kWh the previous month due to lower costs from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs) offset an increase in charges from Power Supply Agreements (PSAs).
The power distributor also said that in particular, WESM charges decreased by P3.7370 per kWh as the supply situation in the Luzon grid improved with less generation capacity on outage, lower demand, and absence of yellow alerts.
“The secondary price cap was also not triggered, marking the first time since October 2021 that the cap was not imposed during a supply month. WESM accounted for 16% of Meralco’s energy requirement in the period from the previous month’s 9%,” Meralco said.
Charges from IPPs also went down by P0.2950 per kWh.
The First Gas plants’ reduced use of more expensive alternative fuel and lower natural gas prices after the quarterly repricing of Malampaya gas that reflected recent trend in international crude oil prices pulled down the IPP rate.
The continued appreciation of the Peso, which affected 95% of IPP costs that are dollar-denominated, also contributed to the reduction.
The Peso ended January 2023 at its strongest level since end-May 2022.
IPPs’ share to Meralco’s energy requirement for the period was at 37%.
On the other hand, PSA charges increased by P0.7970 per kWh due to lower average plant dispatch.
Meralco’s 670-MW baseload PSA with South Premiere Power Corporation (SPPC) remains suspended following the implementation of a Court of Appeals-issued Writ of Preliminary Injunction in January that replaced the Temporary Restraining Order issued previously. PSAs provided 47% Meralco’s total energy requirement for the period.
The reduction in the generation charge balanced the impact of the completion of the third of four distribution-related refunds, equivalent to P0.1923 per kWh for residential customers and is no longer reflected in the customers’ electric bills starting February.
“The remaining distribution-related refund, equivalent to P0.8656 per kWh for residential customers, continue to temper the monthly bills,” Meralco said.
The last refund is set to be completed by May 2023, impact of which will be felt the succeeding month.
Meralco’s distribution charge, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer starting August 2022.
All other charges, including transmission charge and taxes, registered a slight net increase of P0.0108 per kWh. Collection of the Feed-In Tariff Allowance (FIT-All) remains suspended following the issuance of the Energy Regulatory Commission’s Resolution halting the collection of P0.0364 per kWh FIT-All rate for three (3) months from December 2022 to February 2023.
Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-In Tariff Allowance (FIT-All) are all remitted to the government.
With the scheduled maintenance shutdown of the Malampaya facility that historically leads to higher rates, Meralco continues to urge its customers to practice energy efficiency for better management of their monthly electricity consumption.
Meralco is also encouraging more companies to participate in the Interruptible Load Program (ILP), which boosts the available supply and helps spare households from power interruptions during instances of Red Alerts. As of end-January 2023, a total of 117 customer accounts with a total committed de-loading capacity of around 560 MW are part of the ILP in the Meralco franchise area.
Meanwhile, Zaldarriaga admitted that power rates may go up in the coming months.
Zaldarriaga said that historically, the power rates go up during “March, April and May” due to the high demand during Summer.
CurrentPH News Service