By Myrna Velasco
Residential customers of Manila Electric Company (Meralco) will enjoy another round of rate reduction in their September billing at P0.5260 per kilowatt hour (kwh), the fifth straight month that electricity rate is rolled back.
For instance, those in the 200-kilowatt hour consumption range will have an aggregate P105 reduction on their electric bills, Meralco said.
The resulting tariff of the power company in this billing cycle is at P9.0414 per kWh from the previous month’s P9.5674 per kwh.
Meralco said “the fifth straight month of electricity rate decrease” has resulted in a total reduction of P1.52 per kwh.
The generation charge, which has the biggest pie of the pass-on rate to consumers, had been lowered by P0.4429 per kwh this month to P4.5191 per kwh from the month-ago level of P4.9620 per kwh.
The other components in the pass-on tariff had mixed outcome: with the transmission charge going up by a very marginal P0.0056 per kwh; while taxes and other charges had been down by P0.0886 per kwh.
The utility firm qualified that “the generation charge decrease was primarily due to lower charges from the Wholesale Electricity Spot Market (WESM),” which had substantially skidded by P3.6503 per kwh in the last supply month.
Meralco’s procurements from its power supply agreements (PSAs) had been on a slight downtrend of P0.1522 per kwh as reflected in this billing cycle. Supply sourcing from its contracted independent power producers (IPPs), however, had been higher by P0.4844 per kwh.
The utility firm explained that higher-cost purchases from the IPPs had been due to “lower average plant dispatch and the weakening of the peso against the US dollar,” emphasizing that around 95 percent of IPP costs are US dollar-denominated.
Bulk of the utility firm’s supply sourcing last month had been from its PSAs with 44 percent share; then 39 percent from contracted IPPs; while the balance of 17 percent had been from spot market.
The significant downtrend in WESM charges, Meralco noted, had been mainly attributed to the non-occurrence of yellow or red alerts in the power system which should have signalled tightness in supply – that consequently may have triggered spikes in spot market prices.
The distribution firm similarly indicated that “contributing to the lower WESM rate was the refund of net settlement surplus” that was previously ordered by the Energy Regulatory Commission (ERC) – and such will be reflected in this billing cycle.