Lower power rates for September possible, says Meralco

/ 07:28 AM September 04, 2015

The Manila Electric Co. (Meralco) said power rates for its residential customers could drop for the fifth straight month this September.

That is, if relatively stable supply translates to lower generation charges, which accounts for the bulk of overall prices.


“If not lower (than August), rates would at least be stable this September,” Meralco spokesman Joe Zaldarriaga told reporters.

He said that although the company was still collating billing data from suppliers, it had not seen indications of power rates going up.


Based on initial information, there was a higher dispatch level as far as power plants are concerned, Zaldarriaga said.

This may result in lower or “stable” or the same rates compared to August, he said.

Pressure for rates to go up was minimized as well, partly because higher energy dispatch from Meralco’s partners minimized its exposure to the Wholesale Electricity Spot Market (WESM), where rates tend to be volatile.

“We will get a better view when we get our invoices from suppliers by the first few days of next week and then we will get an actual view,” Zaldarriaga said. “We have to remember that since May, rates have really been going down. Hopefully, this will continue.”

The generation charge is significantly affected by changes in rates charged by power plants under the Independent Power Producers (IPPs).

Stable rates at the WESM and/or limited exposure to its spot rates bring down energy costs as well.

Meralco’s distribution, supply, and metering charges remain unchanged after registering a reduction in July.


Regulators trimmed Meralco’s distribution, supply, and metering charge to P1.3810 a kilowatt-hour from the previous rate of P1.5562 per kWh.

In August, at P9.12 per kwh, this month’s overall rate is lower by 26 centavos from the P9.38 per kWh in July, Meralco said in an advisory.

For a typical household consuming 200 kWh, the overall electricity bill dropped by P52.56 compared to July.

Meralco said the main driver for the reduction in overall rates was the generation charge, which decreased by 19 centavos per kWh to P4.55 per kWh.

Rates for July, June, and May also dropped month on month.

Meralco stressed that it does not earn from the pass-through charges such as the generation and transmission charges.

Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines (NGCP).

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TAGS: IPPs, Joe Zaldarriaga, Meralco, Power rates, september
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