Meralco lowers rates by 36 centavos/kWh in December

Residential customers of Manila Electric Co. (Meralco) may see slightly lower bills this month as the power distributor cuts electricity rates due to lower transmission and generation charges.

The overall rate will decline by PHP 0.3557 per kilowatt-hour (kWh) to PHP 13.1145 per kWh in December from PHP 13.4702 per kWh in November, the company said in a statement on Tuesday.

This translates to a downward adjustment of around PHP 71 in the total electricity bill of customers consuming 200 kWh. Those consuming 300 kWh, 400 kWh, and 500 kWh will see their monthly bills go down by PHP 107, PHP 142, and PHP 178, respectively.

“With the holiday season approaching, we hope this rate adjustment gives much-needed relief for our customers,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in a statement.

Mr. Zaldarriaga said that the PHP 0.1462 per kWh reduction in transmission charge was primarily due to the lower ancillary service charges from the reserve market incurred by the grid operator.

Ancillary services are deployed by the grid operator to support the transmission of power from generators to consumers and to maintain reliable operations.

Meralco also attributed the lower rates to the decline in generation charge of PHP 0.1358 per kWh, as charges from independent power producers (IPPs) fell.

IPP rates declined by PHP 0.2127 per kWh due to the drop in natural gas prices, improved plant dispatch, and the peso appreciation as their costs are mostly dollar denominated.

The peso closed at PHP 58.645 per dollar on Nov. 28, strengthening by PHP 0.205 from its PHP 58.85 finish on Oct. 30.

Meanwhile, charges from power supply agreements (PSAs) and Wholesale Electricity Spot Market (WESM) rose by PHP 0.0706 and PHP 0.8086 per kWh, respectively. 

Higher PSA charges were attributed to lower supply brought by the 29-day scheduled maintenance from its contracted coal-fired power plant in Quezon.

IPPs, PSAs, and WESM accounted for 21%, 73%, and 6%, respectively, of Meralco’s total energy requirement for the period.

Taxes and other charges also saw a reduction of PHP 0.0737 per kWh.

“Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government,” the company said.

Meralco’s distribution charge has not been adjusted since the PHP 0.0360 per kWh reduction in August 2022.

For next year, Mr. Zaldarriaga expects electricity rates to be stable as Meralco is able to ensure that its supply requirements are covered.

“So, wala naman kaming nakikitang drastic adjustments sa rates at least for, perhaps, for the first half of the year. (So, we don’t really see any drastic adjustments in the rates, at least for, perhaps, the first half of the year),” he said.

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