Meralco slashes March power rates

by Lenie Lectura – March 9, 2016

from Business Mirror

CUSTOMERS of Manila Electric Co. (Meralco) can expect a P0.19-per-kilowatt-hour (kWh) price cut in their power bills this month, equivalent to at least P38 up to as high as P95 in savings.

The utility firm announced on Wednesday that overall rates went down to P8.63 per kWh, P0.19 per kWh lower than last month and P1.79 per kWh cheaper than in the same period a year ago.

For a typical household consuming 200 kWh, this translates to a reduction of around P38 in electricity bill; P57 for 300 kWh; P76 for 400 kWh; and P95 for 500 kWh.

The decrease in the overall rates was primarily due to the generation- charge component of monthly bills, which decreased by P0.17 per kWh from last month’s P4.17 per kWh. It is also P1.21 per kWh lower compared to March 2015’s P5.21 per kWh.

This month’s generation charge is also P0.49 per kWh lower than 2015’s overall average generation charge of P4.49 per kWh. This reduction in the generation charge, Meralco reported, was mainly on the account of higher dispatch of the plants and, to a lesser extent, the slightly lower fuel cost.

Meanwhile, plants under the power supply agreements (PSAs) registered a reduction of P0.26 per kWh. From an overall average dispatch level of 66 percent in January, this went up to 72 percent in February.

Charges from the independent power producers (IPPs) also decreased by P0.17 per kWh. The dispatch of First Gas plants—Santa Rita and San Lorenzo—went up from 75 percent to 80 percent, and 80 percent to 89 percent, respectively.

Charges from the Wholesale Electricity Spot Market (WESM), on the other hand, registered an increase of P0.63 per kWh, as market prices began to reflect higher system demand.

The share of PSAs and IPPs to Meralco’s total power requirements stood at 49.1 percent and 45.6 percent, respectively. Meanwhile, the share of WESM fell from 6.1 percent in January to 5.3 percent in February.

Transmission charge, meanwhile, registered an increase of P0.03 per kWh, as higher ancillary charges more than offset a reduction in the Power Delivery Service charge of the National Grid Corp. of the Philippines (NGCP).

Taxes, on the other hand, decreased by P0.02 per kWh, following the reduction in generation charge. Other charges, likewise, went down by P0.03 per kWh, primarily driven by the reduction in system loss charge.

Meralco’s distribution, supply and metering charges remain unchanged, after it registered a reduction last July. The utility firm 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 NGCP.

In relation to the lower system loss this month, Meralco also recently reported its 2015 system-loss performance, which is at an all-time low of 6.47 prcent.

Given the system-loss cap of 8.5 percent for Meralco, the difference translated to more than P4.5 billion worth of savings for customers, or a reduction of P0.12 per kWh in 2015.

Meralco’s continuous investments in and upgrading of its facilities, coupled with its intensified efforts to curb power pilferage, have significantly contributed to this constant reduction in the system-loss level over the past many years. In fact, savings due to lower system-loss levels from 2008 to 2015 is equivalent to more than P22 billion, or P0.09 per kWh.

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