Meralco to reduce electricity rates by P15 this month

Meralco to reduce electricity rates by P15 this month

Oct 12, 2022, 4:47 AM
Kaithe Santos

Kaithe Santos


Electricity rates will go down by P15 in the month of October for those who have an average monthly consumption of 200 kWh as per Meralco.

The Manila Electric Company (Meralco) announced on Monday that electricity rates will go down by almost P15 in the total bill of those with an average monthly consumption of 200-kilowatt hours (kWh) this October.

The overall rate for a typical household fell by P0.0737 to P9.8628 per kWh from P9.9365 last month. The reduction is equivalent to around P22 less in total electricity bill for a residential user consuming 300 kWh, P29 for 400 kWh, and P37 for 500 kWh, Business Mirror reported.

The Feed-in-Tariff Allowance (FIT-All) was reduced by P0.0619 per kWh in October, lowering the overall rate. Starting this month, the approved FIT-All collection rate is P0.0364 per kWh, a decrease from the prior rate of P0.0983 per kWh.

Meanwhile, the generation charge also decreased by P0.0201 to P6.9192 from P6.9393 per kWh in September.

Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) charges were reduced by P0.5073 and P0.0702 per kWh, respectively. This is due to the reduced use of more expensive alternative fuel by the First Gas-Sta. Rita, San Lorenzo plants, and the increased plant utilization of IPPs and PSAs.

It managed to offset the impact of the steep depreciation of the peso in September. Dollar-denominated costs accounted for 98 percent of IPP charges, as well as 38 percent of PSA charges.

The decreased IPP and PSA charges more than offset higher Wholesale Electricity Spot Market (WESM) charges, which increased by P4.8128 to P11.9990 per kWh due to constrained supply conditions in the Luzon grid.

On the day of the outage last September 12, both demand and capacity increased and the grid was placed on Red Alert. Spot market prices remained consistently high during the September supply month, triggering the secondary price cap in 55.16 percent of all trading intervals, up from 4.7 percent in August.

Meralco sourced only 4 percent of its supplies from the WESM in September, down from 10 percent in August.

Transmission, taxes, and other expenses for residential users increased slightly by P0.0083 per kWh. Pass-through charges for generation and transmission are paid to power suppliers and system operators respectively, while taxes, universal charges, and FIT-All are paid to the government.

Meralco said it earns only from distribution, supply, and metering costs. Meralco's charges for a typical residential customer were reduced by P0.0360 per kWh beginning in August 2022. Prior to this adjustment, costs had remained unchanged since the July 2015 cut.

The continued distribution-related rebates, totaling P1.8009 per kWh for residential consumers, help to keep customers' monthly costs in check.

The reduction of at least P15 in power costs will alleviate the pressure of paying bills, especially considering rising necessity prices.

Tags: #Meralco, #Electricity, #reductioninOctoberbill

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