Drop in electric bills seen this month

Customers of Manila Electric Co., the country’s biggest power distributor, can expect lower electricity bills this month as the generation charge fell by 16.70 centavos a kilowatt-hour to P5.2051 a kWh.

This means that households consuming 100 kWh a month can expect a decrease of P16.70 in their electricity bills, while those that use 200 kWh a month will enjoy a P33.40 reduction for September. Households that consume 300 kWh and 400 kWh monthly can also expect decreases of P50.10 and P66.80, respectively.

However, although there will be a decrease in the generation charge this month, other components of the electricity bill are expected to increase this September.

For one, Meralco will start collecting this month an additional charge of 3.06 centavos a kWh under a separate item called “prior month’s generation cost.” The amount to be recovered represented the company’s collection of under-recoveries amounting to P944 million.

Meralco will also start collecting a higher universal charge for missionary electrification after the Energy Regulatory Commission allowed state-run National Power Corp. (Napocor) to increase last month the UCME by 7.09 centavos a kWh to 11.63 centavos a kWh.

Still, the net effect will be a decline of about 6.6 centavos a kWh.

According to Meralco, the primary reason for the reduction in the generation charge was the P1.63-a-kWh decrease in the cost of electricity purchased from the wholesale electricity spot market (WESM).

Also, the cost of electricity generated by independent power producer Quezon Power Philippines Ltd. slightly dipped by 37 centavos a kWh due to an improvement in its dispatch (or power generation output) level.

The reductions in the rates of the WESM and QPPL had more than offset the increases in the power prices of Napocor and Meralco’s two other IPP sources, First Gas Holdings’ 1,000-megawatt Sta. Rita and the 500-MW San Lorenzo natural gas plants.

According to Meralco, Napocor’s power rates rose due to the higher share of purchases during peak periods while those of First Gas increased due to higher fuel cost. The distribution utility, however, maintained that despite the increase in the cost of power sourced from the two IPPs, these facilities remained to be the company’s cheapest source of electricity.

For the supply month of August (to be billed this month), Meralco sourced 49 percent of its electricity requirements from the IPPs, 46 percent from Napocor and only 5 percent from WESM.