Meralco to reduce electricity rates in July

INQUIRER FILE PHOTO

MANILA, Philippines — Listed power distributor Manila Electric Co. (Meralco) announced the electricity bill for July will decline by 71 centavos per kilowatt-hour, reducing the overall rate for the month to P9.7545 per kWh from P10.4612 per kWh in June.

“This month’s reduction effectively reversed all increases in the overall power rates since the start of the year,” said Meralco in a statement.

For a residential customer with a consumption of 200 kWh, this is equivalent to a decrease of about P141 in the total electricity bill.

The generation charge for the June billing period climbed by P0.2166 per kWh to P6.7756 per kWh from P6.5590 per kWh in the previous month. Meralco said the generation charge also includes the last installment of deferred generation costs for the April bill, equivalent to an add-on of around P0.13 per kWh.

Prices in the Wholesale Electricity Spot Market (WESM) rose by P3.9649 per kWh amid tight supply conditions in Luzon. WESM is the marketplace for trading electricity as a commodity.

During the period, grid operator National Grid Corp. of the Philippines raised red and yellow alerts in the region.

A red alert is raised when power supply is insufficient, resulting in power interruptions. On the other hand, a yellow alert is declared in the event of thin power reserves, which may lead to rotational brownouts.

Charges from power supply agreements (PSAs) increased by P0.3186 per kWh on the back of the peso’s 5-percent depreciation, its steepest decline since June 2003.

Meralco said 32 percent of its PSA costs are dollar-denominated. Moreover, the continued surge in international coal prices jacked up rates from its supply deals.

Fees from independent power producers dropped by P0.4669 per kWh, more than negating the impact of the peso’s slump on their charges.

Offset by refunds

Higher generation fees were offset by the P21.8-billion refund ordered by the Energy Regulatory Commission (ERC), translating to a rebate of P0.8656 per kWh for residential customers.

Meralco began implementing the ERC refund this month, to be applied within 12 months or until the amount is fully reimbursed.

“As a highly regulated entity, Meralco’s rates undergo a review and confirmation process to make sure they are fair and reasonable. The immediate implementation of the ERC decision was able to more than offset the impact of higher generation charge this month to the benefit of our customers,” Meralco head of regulatory management Jose Ronald Valles said.

The transmission charge fell by P0.0012 per kWh while taxes and other charges went down by P0.0565 per kWh.

The collection of P0.0025 per kWh representing the Universal Charge-Environmental Charge remains suspended, as ordered by the regulatory agency.

Distribution, supply, and metering charges, meanwhile, remained unchanged since July 2015.

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