Meralco slashes power rate by nearly P1 per kWh this month
By Sheldeen Joy Talavera, Reporter
RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see lower electricity bills for the first time this year, due to a sharp drop in generation and transmission charges.
In a statement on Monday, Meralco said the overall rate would decrease by P0.9879 per kilowatt-hour (kWh) to P10.9518 per kWh in April from P11.9397 in March.
“The substantial reduction in the overall electricity rate this month wiped out the rate increase since January 2024, bringing the year-to-date adjustment to a net decrease of P0.3066 per kWh,” the power distributor said.
Households consuming 200 kWh will see their monthly electricity bill go down by about P198.
Meanwhile, households consuming 300 kWh, 400 kWh and 500 kWh would see a reduction in their monthly bills by P296, P395 and P494, respectively.
Meralco attributed this month’s decline to lower generation and transmission charges, which accounted for about 36.6% and 47.2% of a consumer’s electricity bill for April.
The generation charge fell by P0.3613 per kWh due to lower costs from independent power producers (IPP) and power supply agreements (PSA), which offset the increase in Wholesale Electricity Spot Market (WESM) charges.
Joe R. Zaldarriaga, Meralco’s vice-president and head of corporate communications, said at a briefing that charges from IPPs fell by P1.071 per kWh due to lower costs at power plants operated by First Gen Corp.
“The reduction was mainly due to the nonuse of liquefied natural gas (LNG) by both Sta. Rita and San Lorenzo and continued withholding of incremental Malampaya gas costs for the First Gas-Sta. Rita under its new gas sale and purchase agreement (GSPA),” he said.
The Malampaya pricing under First Gas-Sta. Rita’s old GSPA and only landed costs of LNG can be passed through “until separate ERC approval of full costs,” Meralco said, citing an order issued by the Energy Regulatory Commission (ERC).
PSA charges went down by P0.5733 per kWh due to lower fuel costs from Meralco’s emergency PSAs with South Premier Power Corp. and San Buenaventura Power Ltd.
On the other hand, tighter supply conditions in the Luzon grid drove WESM rates higher by P1.0114 per kWh.
IPPs, PSAs and WESM accounted for 29%, 46% and 25%, respectively, of the company’s total power requirement for April.
The transmission charge decreased by P0.4665 per kWh following ERC’s suspension of settlements in the reserve market.
The reserve market, which was launched in January, allows the optimization of the market operator and system operator interfaces and automated real-time dispatch of committed ancillary services.
On the other hand, taxes and other charges dipped by P0.1601 per kWh.
“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges and the Feed-In Tariff Allowance or FIT-All are all remitted to the government,” the company said.
Distribution charges have been unchanged at P0.0360 per kWh since August 2022.
“Despite the rate reduction, Meralco continues to encourage its customers to continue practicing energy efficiency especially during summer when consumption historically increases anywhere from 10% to 40% due to warmer temperatures,” Mr. Zaldarriaga said.
Meanwhile, Meralco has renewed its call for large power consumers to enroll in the government’s Interruptible Load Program, which asks them to use their generation sets or shift their operations instead of getting power from the grid.
To date, over 100 companies with about 530-megawatt de-loading capacity across the Meralco franchise are enrolled in the program.
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.
