Meralco cuts May power rates by 41 centavos per kWh

by Lenie LecturaMay 6, 2016

from Business Mirror

POWER rates this month are expected to go down by 41 centavos per kilowatt-hour (kWh) to P8.444 per kWh, the Manila Electric Co. (Meralco) said on Friday.

Meralco residential customers with an average monthly consumption of 200 kWh would see their electricity bills reduced to P82. This month’s overall rate is lower by P1.54 per kWh compared to May 2015’s P9.98 per kWh. It is also the lowest since  January 2010, or over a period of six years. The reduction was due to the downward movement in generation, transmission, taxes and other charges.

Generation charge, which decreased by P0.21 per kWh from last month, stood at P3.88 per kWh. It is P0.93 per kWh lower compared to May 2015’s P4.81 per kWh, and is the lowest since October 2004.

Power plants utilizing natural gas from Malampaya, namely, South Premier-Ilijan, First Gas-Santa Rita  and First Gas-San Lorenzo, all registered reduced charges, mainly due to lower fuel costs.

 Malampaya natural-gas prices are adjusted quarterly, and are indexed to world crude-oil prices.  The current repricing covers months when crude-oil spot prices in the world market fell to as low as $31 per barrel. The three natural-gas plants supplied more than half, or 54 percent, of Meralco’s requirements.

As a result, charges from the independent power producers (IPPs) decreased by P0.19 per kWh, led by lower rates from the First Gas plants. Meanwhile, plants under the power-supply agreements (PSAs) registered a reduction of P0.25 per kWh, driven by the higher dispatch of Calaca. Masinloc also registered lower rates due to lower instances of outages. These offset higher charges from Pagbilao, which was on scheduled maintenance from April 1 to 16.  Similarly, charges from the Wholesale Electricity Spot Market (WESM) registered a decrease of P1.98 per kWh.  This was mainly due to lesser power-plant outages during the April supply month as compared to March.

At the time, supply was affected by the scheduled maintenance of several large power-generating units, including Calaca unit 2, GNPower unit 1, South Luzon Thermal Energy Corp. unit 1, Masinloc unit 2 and Quezon Power. The share of PSAs, IPPs  and WESM to Meralco’s total power requirements stood at 45.9 percent, 42.4 percent and 11.7 percent,  respectively.  Transmission charge also decreased by P0.10 per kWh due to the reduction in the National Grid Corp. of  the Philippines (NGCP)’s ancillary charges and slight decrease in Power Delivery Service (PDS) charge.  Taxes and other Charges also decreased by P0.10 per kWh following the reduction in generation and transmission charges.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 10 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.