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Meralco announces lower power cost in May

Electricity rates decrease despite rise in spot market
06:35 PM May 09, 2019

The Manila Electric Company (MERALCO) announced today that overall electricity rates decreased to P10.2866 per kWh this month from last month’s P10.5594 per kWh. The downward adjustment of P0.2728 per kWh will mean a decrease of around P55 in the total bill of a typical household consuming 200kWh.

Lower IPPs and PSAs charges bring down the generation charge

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From P5.6322 per kWh last month, generation charge for May went down to P5.5508 per kWh, a decrease of P0.0814 per kWh.

The generation charge decrease is primarily due to lower charges from the Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).

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Cost of power from  IPPs and PSAs decreased by P0.7544 per kWh and P0.5143 per kWh, respectively, this month due to the strengthening of Peso against US Dollar and lower fuel prices (for coal and Malampaya natural gas). About 98% of IPP charges and 72% of PSA charges are dollar-denominated.  The price of natural gas from Malampaya, which accounts for about 64% of Meralco’s supply, decreased this month as a result of quarterly repricing to reflect lower crude oil prices in the world market. IPPs and PSAs provided 43% and 45% of Meralco’s supply needs, respectively.

Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) increased by P3.5355 per kWh because of tight supply conditions in Luzon resulting in seven (7) instances of Yellow Alerts and seven (7) instances of Red Alerts declared by the National Grid Corporation of the Philippines (NGCP) during the supply month. WESM provided 12% of Meralco’s supply needs.

Transmission and other charges decrease

Transmission charge for residential customers decreased by P0.0808 per kWh due to higher system load factor. Taxes and other charges also decreased by P0.1106 per kWh.

Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 46 months, after these registered reductions in July 2015. Meralco reiterated 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 NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.

Meralco provides energy efficiency tips for customers

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During summer, Meralco once again encourages its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy, such as: (i) unplugging appliances when not in use to avoid “phantom load”, (ii) using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency, (iii) using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously with just one switch, and (iv) maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance. For more helpful tips, customers may visit Meralco’s website at www.meralco.com.ph or its social media accounts, twitter @meralco and facebook at www.facebook.com/meralco.

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