Meralco drops rates for 3rd straight month
MANILA, Philippines – Manila Electric Company (Meralco) customers within the 200 kilowatt-hour (kWh) consumption bracket will see a P38 ($0.84*)- drop in their electricity bill as the generation charge decreases in January.
Power rates are going down by P0.19 ($0.004) per kWh in January – the third month that Meralco rates have been reduced.
The generation charge – the largest component in the electricity bill that goes to generation companies or power producers – further decreased by P0.22 ($0.005), from P4.94 ($0.1097) in December to P4.72 ($0.1048) this January.
This is the lowest generation charge in 15 months.
Lower generation charge
The reduced generation charge was mainly driven by lower charges from the power facilities under the Power Supply Agreements (PSAs).
PSAs registered a reduction of P0.73 ($0.016) per kWh due to the normal operations of the power plants and the lower cost of fuel during the December supply month.
Coal prices of some suppliers also went down by almost $2 per metric ton.
The lower PSA charges also offset increased charges from Independent Power Producers (IPPs) and the Wholesale Electricity Spot Market (WESM).
IPPs increased charges by P0.24 ($0.0053) and P1.68 ($0.0373) per kWh for WESM.
The additional payment and compensation to power generators affected by the administered and secondary price cap implementation for the February to July 2014 supply months caused WESM charges to increase.
PSAs (52%), IPPs (45%), and WESM ($3%) accounted for Meralco’s total power requirements for the December supply month.
A rate increase soon?
The P0.026 ($0.0005) decrease in taxes and P0.011 ($0.00024) cumulative decrease in the system loss charge and subsidies also contributed to the overall downward adjustment in the bills to households.
Transmission charge increased by P0.062 ($0.00138) per kWh.
Meralco said the series of lower generation charges over the past few months may be difficult to sustain, especially as warmer temperatures set in, coinciding with the shutdown of the Malampaya gas facility sometime in March to April this year.
The upward adjustment and longer threshold reference period before the secondary price cap in the WESM would also affect the generation charge.
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 such as the plants selling to Meralco through the WESM and under the PSAs, and to IPPs as well.
Payment for the transmission charge goes to the National Grid Corporation of the Philippines. Only the distribution, supply, and metering charges accrue to Meralco. – Rappler.com
$1 = P45.04