Power retailer Manila Electric Co. announced Monday a rate reduction of P0.5260 per kilowatt-hour equivalent to around P105 for households consuming an average of 200 kilowatt-hours this month.
Meralco said in a statement it marked the fifth consecutive month of lower power rates as overall electricity rates for a typical household consuming 200 kWh declined to P9.0414 per kWh in September from P9.5674 per kWh in August.
Rates dropped by almost P1.52 per kWh since April, according to Meralco, the country’s biggest power distributor with more than six million customers in its franchise area.
Generation charges fell by P0.4429 per kWh in September to P4.5191 per kWh from P4.9620 per kWh last month. This was mainly due to the lower charges at the Wholesale Electricity Spot Market, the country’s trading floor of electricity.
Meralco said WESM charges declined by P3.6503 per kWh amid the improved supply conditions in the Luzon grid as grid operator National Grid Corporation of the Philippines did not declare any yellow or red alerts during the whole supply month of August, compared to the nine yellow alerts in July.
The refund of the net settlement surplus as directed by the Energy Regulatory Commission to the Philippine Electricity Market Corp. and the Independent Electricity Market Operator of the Philippines also contributed to the lower rates.
PEMC is the governing body while IEMOP is the operator of WESM. Meralco sourced 17 percent of its supply needs from WESM in August.
The cost of power under Meralco power supply agreements decreased by P0.1522 per kWh while the cost of power from independent power producers increased by P0.4844 per kWh because of the lower average plant dispatch and the weakening of the peso against the US Dollar.
Meralco said around 95 percent of IPPs costs were dollar-denominated. Meralco sourced 39 percent of its supply from IPPs and 44 percent from PSAs.
Transmission charges for residential customers slightly increased by P0.0056 per kWh but this was offset by lower taxes and other charges.
“It is likely we will see a reduction in the generation charge this September. Despite the depreciation of the peso, which will put upward pressure on charges from IPPs, there are two factors that can offset the effect of the peso’s weakening,” Meralco said.
“One is the improved supply situation. There were no yellow or red alerts during the August supply month so that we expect WESM charges to go down. The other is the NSS refund being implemented by PEMC, as directed by the ERC,” Meralco head of utility economics Lawrence Fernandez said over the weekend.
Meralco said its distribution, supply and metering charges were unchanged this month.
