Meralco lowers power rates for Jan.

Residential Customers in areas served by Manila Electric Co. (Meralco) will see a reduction in their electricity bills this month, mainly due to lower generation charges for the period.

The overall rate will go down by PHP 0.2189 per kilowatt-hour (kWh) to PHP 11.7428 per kWh in January from PHP 11.9617 per kWh in December, the power distributor said in a statement on Monday.

This will translate to a downward adjustment of around PHP 44 in the total electricity bill of residential customers consuming 200 kWh. Those consuming 300 kWh, 400 kWh, and 500 kWh will see a reduction of PHP 66, PHP 89, and PHP 112, respectively, in this month’s bills.

Meralco said it slashed power rates after the generation charge declined by PHP 0.1313 per kWh to PHP 6.8358 per kWh primarily due to lower costs from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs). 

WESM charges decreased by PHP 0.8840 per kWh due to the improved supply situation in the Luzon grid as both average peak demand and average capacity on outage went down.

Charges from IPPs declined by PHP 0.1593 per kWh because of the peso appreciation, which affected 97% of the costs that were dollar denominated. The lower cost of fuel and higher dispatch of the First Gas-Sta. Rita plant also contributed to the decrease.

The peso closed at PHP 57.845 on Dec. 27, appreciating by PHP 0.775 from its PHP 58.62 finish on Nov. 29.

“These reductions tempered the P0.5638 per kWh increase in charges from power supply agreements (PSAs) due to lower plant dispatch,” the company said.

WESM, IPPs, and PSAs accounted for 34%, 30%, and 36%, respectively, of Meralco’s total energy requirement for the period.

On other components, transmission and other charges dropped by PHP 0.0876 per kWh.

Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively. Taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government.

Meralco’s distribution charge has remained unchanged at PHP 0.0360 per kWh since August 2022.

“While electricity rates decreased this month, we would like to remind our customers to continue practicing energy efficiency as a way of life especially with the dry season is fast approaching,” said Joe R. Zaldarriaga, Meralco’s vice-president and head of corporate communications.

Meanwhile, Meralco customers may expect a slight reduction in their power bills in February as the Energy Regulatory Commission (ERC) earlier directed distribution utilities to refund all collected and unutilized regulatory reset expert costs. All future collection of these costs was also stopped.

“For Meralco, this means a one-time refund of 22.6 centavos per kWh plus another refund that will be reflected as a separate line item in the bill of PHP 0.0023 per kWh. So, this will be reflected in the February bills of customers,” Lawrence S. Fernandez, Meralco’s vice-president and head of utility economics, said at a briefing.

To recall, the ERC has also allowed the recovery of the remaining PHP 3.277 billion for power generators that supplied the reserve market in February and March 2024.

The approved amount will be billed to the consumers in Luzon over a period of three months, adding PHP 0.12 per kWh in the transmission charge starting February.

The reserve market allows the system operator to procure power reserves from the WESM to meet the reserve requirements of the energy system. Its full commercial operations commenced in January last year.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. –  Sheldeen Joy Talavera, Reporter