Meralco cuts January rate ‍‍by P0.41/kWh | Inquirer Business

Meralco cuts January rate ‍‍by P0.41/kWh

Lower cost of electricity from IPPs
/ 05:30 AM January 09, 2020

Customers of Manila Electric Co. will enjoy a respite after three consecutive months of increases, with rates in the January billing period going down by 41 centavos per kilowatt-hour.

Meralco said in a statement the decrease could be attributed to the lower cost of electricity sourced through power supply agreements (PSAs) and from independent power producers (IPPs).


The latest change counters by about half the 82.09 centavos of accumulated hikes seen in the fourth quarter of 2019. It also means a reduction in customers’ monthly bill of about P82 for a typical residential customer that consumes 200 kWh in a month.

The distribution giant said that for January, its overall charge went down to P9.4523 per kWh from 9.8623 per kwh in the December billing period.


“This month’s overall rate is also 38.62 centavos per kWh lower than the January 2019 rate of P9.8385 per kWh,” the company said.

The generation charge alone went down by 29.28 centavos per kWh to P4.9039 per kWh from P5.1967 per kWh previously.

Meralco said this was largely due to a reduction of 86.59 centavos per kWh in the cost of supply secured through PSAs, which accounted for 49 percent of Meralco’s supplies.

“Lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission,” Meralco spokesperson Joe Zaldarriaga said.

“The early completion of annual capacity payment for Sual Unit 1, Ilijan, Pagbilao Unit 1, and Panay Energy resulted in savings immediately passed on to consumers by way of lower electricity rates,” he added.Also, the cost of supply sourced from IPPs went down by 6.34 centavos per kWh, thanks to the strengthening of the peso against the US dollar.

IPPs represented 41 percent of Meralco’ supplies, and 96 percent of costs associated with these are dollar-denominated.

On the other hand, prices at the wholesale electricity spot market—which provided 9 percent of Meralco’s supply—went up by P1.7031 per kWh because of tighter supply conditions in the Luzon grid.


Further, Meralco said there was a decrease of 5.17 centavos per kWh in the transmission charge for residential customers while taxes and other charges also went down by 6.56 centavos per kWh.

Meralco’s distribution, supply and metering charges have remained unchanged for 54 months.

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TAGS: January billing period, Manila Electric Co., Meralco
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