Filipino consumers are in for a slight reprieve from inflation this love month as customers of the Manila Electric Co. (Meralco) will get lower electricity bills in February, mainly due to lower generation charges.
Meralco announced on Friday that it was reducing its rates by P0.0106 per kilowatt-hour (kWh), meaning that a Filipino household that consumes an average of 200 kWh a month will pay P2 less.
The last rollback in the electricity rates of the largest private sector electric distribution utility company in the Philippines was in October of last year, when it trimmed its rates by seven centavos for those who consumed 200 kWh a month.
The latest rate adjustment brought the overall rate for a typical household down to P10.8895 per kWh from the previous month’s P10.9001 per kWh.
Meralco said it reduced this month’s rate mainly due to lower generation charges, as well as lower costs from independent power producers (IPP).
Generation charge
The IPP rate was cut by P0.2950 per kWh according to Meralco, citing that the power plants operated by First Gas Power Corporation reduced the use of more expensive alternative fuel.
Natural gas prices were also lower after the quarterly repricing of Malampaya gas that reflected recent trends in international crude oil prices pulled down the IPP rate, Meralco said.
It noted that all these offset the increase in the charges under power supply agreements (PSA), which went up by P0.7970 per kWh due to lower average plant dispatch.
“The reduction in the generation charge balanced the impact of the completion of the third of four distribution-related refunds, equivalent to P0.1923 per kWh for residential customers and is no longer reflected in the customers’ electric bills starting February,” Meralco said in a statement.
Meralco also cited the remaining distribution-related refund, equivalent to P0.8656 per kWh for residential customers, which it expects to temper the monthly bills of its 7.6 million customers in the country.
High cost
“The last refund is set to be completed by May 2023, impact of which will be felt the succeeding month,” it added.
The high cost of electricity in the Philippines is one of the factors most cited by local businesses for driving up their manufacturing costs, thus affecting the final price tag of their goods.
Back in January, inflation in the country accelerated to 8.7 percent, faster than the 8.1 percent in December 2022, driven by faster increases in housing rentals, electricity and water rates as well as in the prices of vegetable, milk and eggs, and fruits and nuts.