For the 4th straight month, the Manila Electric Company (Meralco) is slashing its rates.

Meralco announced on Monday, August 10, that power rates for the month are going down by 20.55 centavos to P8.4911 per kilowatt hour (kWh).

The downward adjustment will mean a P41 decrease in the August bill for a household that consumes 200 kWh.

Meralco attributed the reduction to lower charges from independent power producers (IPPs) and the Wholesale Electricity Spot Market (WESM), as well as force majeure claims from power supply agreements (PSAs) despite prices inching up.

WESM, which provides 15.5% of Meralco’s needs, charged P1.12 per kWh lower in August due to improved supply in the Luzon grid as well as fewer outages.

IPPs charged P0.3284 per kWh less due to lower gas prices. IPPs account for 33.9% of Meralco’s total supply.

PSAs, which supply half of Meralco’s needs, inched up by P0.2722 per kWh as sales decreased.

Meralco, however, invoked force majeure claims with First Gen Hydro Power Corporation, citing the lower power demand during the coronavirus lockdown.

Meralco was able to claim a total of P82 million, which it said led to customer savings of P0.0285 per kWh. Total savings from claims in the past 5 months amounted to P1.9 billion.

The latest rate is more than a peso lower than the August 2019 rate of P9.5674 per kWh, and the lowest in nearly 3 years, Meralco said. – Rappler.com