Meralco to lower power rates in September

by Lenie LecturaSeptember 6, 2016

from Business Mirror

THE Manila Electric Co. (Meralco) announced lower power rates for September, despite incidents of frequent power-plant shutdowns in Luzon last month.

The residential rate this month is down to P8.46 per kilowatt-hour (kWh), lower by P0.0451 per kWh. The rate cut translates to a reduction of around P9 in the electricity bill of a household with monthly consumption of 200 kWh; P13.53 for 300 kWh; P18.04 for 400 kWh; and P22.55 for 500 kWh.

Meralco said the reduction is due to the downward movement in the transmission charge, which more than offset a higher generation charge.

This month’s overall rate is lower by P0.09 per kWh compared to September 2015’s P8.55 per kWh. Meralco noted a P0.0879-per-kWh increase in the generation charge to P3.94 per kWh.

Cost of power from the independent power producers (IPPs) increased by P 0.17 per kWh.  This was mainly because of the reduction in the operating hours of Quezon Power Philippines Ltd., which went on forced outage from August 5 to August 8, and First-Gas Santa Rita, with Modules 10 and 20 under scheduled maintenance on August 13 and 14 and the whole August supply month, respectively. The share of the IPPs to Meralco’s total requirements for the August supply month stood at 35.6 percent. Overall charges from the Wholesale Electricity Spot Market (WESM) decreased by P0.32 per kWh. Spot prices went up following the seven instances of yellow alert and three instances of red alert in the August supply month, versus just one instance of yellow alert during the July supply month.

However, this was more than offset by the reduction in the effective rate of line rentals and other charges, as the share of WESM purchases went up to 20.6 percent, from 9.5 percent the previous month.

Meanwhile, the 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 decrease of P0.02 per kWh. The share of PSAs stood at 43.2 percent.

The higher generation charge was more than offset by a decrease in the transmission charge of P0.10 per kWh, mainly due to the reduction in National Grid Corp. of the Philippines’s ancillary charges.  Taxes and other charges also decreased by a combined amount of around P0.04 per kWh.

Meralco’s distribution, supply and metering charges remained unchanged for 14 months, after these registered a reduction in July 2015. Meralco said 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 NGCP.