Lower household power bills for Meralco customers in June

by Lenie LecturaJune 7, 20163

from Business Mirror

The Manila Electric Co. (Meralco) will collect lower power rates this month from residential customers on account of a decrease in generation charge.

Meralco said on Tuesday that residential rate for a typical 200 kilowatt-hour (kWh) household will go down this June by around P0.13 per kWh, thereby, bringing power rates down to P8.32 per kWh.

This translates to a reduction of around P25 in their electricity bill. The reduction is due to the downward movement in the generation charge, which more than offset a higher transmission charge.

This month’s overall rate is lower by P1.08 per kWh, compared to June 2015’s P9.40 per kWh.

The decrease in the overall rate is primarily due to the generation charge, which is P0.16 per kWh lower than last month’s.  At P3.72 per kWh, it is also P0.74 per kWh lower compared to June 2015’s P4.46 per kWh. This month’s generation charge is the lowest since October 2004.

Charges from the Wholesale Electricity Spot Market (WESM) decreased by P0.98 per kWh due to lower spot prices driven by the fewer generator outages during the May supply month compared to the previous month.  The share of WESM to Meralco’s total power requirements inched up from 11.7 percent to 12.8 percent.

The cost of power from the independent power producers (IPPs) decreased by P0.22 per kWh. This was mainly due to an improvement in the dispatch of Quezon Power Philippines Ltd. Meanwhile, cost of power sourced from plants under the Power Supply Agreements (PSAs) was almost at the same level as last month, with only a slight increase of P0.02 per kWh.

The share of PSAs and IPPs stood at 46.1 percent and 41.1 percent, respectively.

The lower generation charge more than offset an increase in the transmission charge of P0.066 per kWh, due to higher ancillary service charges. Beginning this June and up to November, the transmission charge will include the collection of an ancillary service differential that will go to Power Sector Assets and Liabilities Management Corp.

Taxes and other charges also decreased by a combined amount of around P0.033 per kWh, following the reduction in the generation charge.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 11 months, after they registered a reduction 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 National Grid Corp. of the Philippines.