Manila Electric Co. (Meralco) lowered its overall rates for the month of March compared to February. The country’s biggest power retailer in terms of sales said the decline in rates for customers was due to lower generation costs charged by power plant operators, which cited higher energy sales volume and lower fuel cost.
Meralco said in an advisory that the overall rate for its residential customers this March was P8.63 a kilowatt-hour (kWh). This is lower by 19 centavos a kWh compared to last month’s P8.82.
For a typical household consuming 200 kWh, this translates to a reduction of P38 in their electricity bill.
The decrease in the overall rates was primarily due a drop of 17 centavos a kWh in the generation charge compared to last month. It is also P1.21-a-kWh lower compared to March 2015’s P5.21. This reduction in the generation charge was primarily due to the higher dispatch of the plants and, to a lesser extent, the slightly lower fuel cost, Meralco said.
Plants under the Power Supply Agreements (PSAs) registered a reduction of 26 centavos a kWh. From an overall average dispatch level of 66 percent in January, this rose to 72 percent in February.
Charges from Independent Power Producers (IPPs) also decreased by 17 centavos a kWh. The dispatch of First Gas plants Sta. Rita and San Lorenzo went up from 75 percent to 80 percent and 80 percent to 89 percent, respectively.
Charges from the Wholesale Electricity Spot Market (WESM) increased by 63 centavos a kWh as market prices began to reflect the higher system demand.
The share of PSAs and IPPs to Meralco’s total power requirements stood at 49.1 percent and 45.6 percent, respectively. The share of WESM fell from 6.1 percent in January to 5.3 percent in February (the reference period for the WESM component in the March billing).
Transmission charge increased by 3 centavos a kWh as higher ancillary (power reserves) charges more than offset a reduction in the Power Delivery Service charge of National Grid Corporation of the Philippines (NGCP).
Taxes dropped by 2 centavos a kWh following the reduction in generation charge. Other charges slid by 3 centavos a kWh, primarily driven by the reduction in system loss charge.
Meralco’s distribution, supply and metering charges remained unchanged since having been reduced in July 2015. The power retailer said it did 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 NGCP.
Noting the lower system loss this month, Meralco also recently reported that its 2015 system loss performance was at an all-time low of 6.47 percent. Given the system loss cap of 8.5 percent for Meralco, the difference translated to more than P4.5 billion worth of savings for customers, or a reduction of 12 centavos a kWh in 2015.
Meralco’s continuous investments in upgrading its facilities, coupled with its intensified efforts to curb power pilferage, have significantly contributed to the constant reduction in the system loss level over the past years. In fact, savings due to lower system loss levels from 2008-2015 is equivalent to more than P22 billion or 9 centavos a kWh.