Electricity rates continue drop in Nov.

Electricity rates for consumers in the franchise area of  Manila Electric Co. (Meralco) will decline further in November, as lower generation charges bring down overall power rates to their lowest levels in almost seven years.

In a press statement, Meralco said the rate for a typical household will go lower this month by P0.0781 per kilowatt-hour (kWh), thus bringing it down to P8.26 per kWh—the lowest since January 2010.

“This month’s decrease translates to a reduction of around P16 in the electricity bill of a household with monthly consumption of 200 kWh,” the country’s largest power distributor said. “The reduction is mainly due to the downward movement in the generation charge.”

This month’s overall rate is lower by P0.29 per kWh compared to November 2015’s P8.55 per kWh. This is also the fourth straight month of reduction in the overall residential rate, Meralco added.

For November, the power distributor said there was a decrease in the generation charge, which is P0.0502 per kWh lower than last month’s P3.8938 per kWh.

At P3.8436 per kWh, the generation charge is around P0.24 per kWh lower compared to November 2015’s P4.08 per kWh.

“The decrease resulted mainly from lower charges from the Wholesale Electricity Spot Market (WESM),” the company said. “This offsets increases in independent power producer (IPP) and power service agreement (PSA) costs brought about by higher coal and natural gas prices and low dispatch.”

Overall charges from the WESM decreased by P0.2756 per kWh. The share of WESM purchases to Meralco’s total requirements went up from 16.1 percent to 20.1 percent.

Meanwhile, the cost of power sourced from plants under PSAs increased by P0.0164 per kWh primarily due to higher fuel costs.  Coal prices in the region continued to rise, from $67.41 per metric ton in August 2016 to $72.70 in September.  The share of PSAs stood at 42.5 percent.

The cost of power from IPPs also increased by P0.0549 per kWh, primarily due to the scheduled outage and lower dispatch of San Lorenzo, and the higher cost of natural gas following its quarterly repricing. The share of the IPPs to Meralco’s total requirements for the October supply month was at 37.3 percent.

There was also a decrease in the transmission charge by P0.0177 per kWh, mainly due to the reduction in the ancillary charge differential that National Grid Corporation of the Philippines (NGCP) began to collect from its Luzon customers in June.

Taxes and other charges also decreased by a combined amount of around P0.0102 per kWh.

“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 16 months, after these registered reductions in July 2015,” the company said, explaining that it does not earn from the pass-through charges, such as the generation and transmission charges.

A pass-through charge means the payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP.

Meralco, in partnership with the Department of Energy (DOE) and local government units, continues to give beneficiaries access to safer, legal electricity supply as it makes power available to Filipinos previously without any electrical connection.

From July 8 to Nov. 4 this year, the DOE-Meralco partnership has energized a total of 20,101 households in the areas of Gaya-Gaya, San Jose del Monte and other municipalities in Bulacan, Laguna, Cavite and some parts of Rizal, Happy Land Aroma, the Baseco Compound, Isla Puting Bato and Parola Area in Tondo, Manila.

Through these efforts, Meralco was able to continue supporting Energy Secretary Alfonso Cusi’s commitment to accomplish the marching order of President Duterte to provide Filipino people the chance to enjoy a more comfortable quality of life through the delivery of safe, stable and reliable electricity services, the company said.