Lower Meralco bills seen for December

Pedestrians walk past a Meralco sign in suburban Manila in this file photo. AFP FILE PHOTO

MANILA, Philippines—Customers of Manila Electric Co., the country’s biggest power distributor, can expect their electricity bills to go down by 31 centavos per kilowatt-hour in December due to reductions in the generation, transmission and system loss charges.

This means that households consuming 100 kWh every month can expect a decrease of P24.74 in their power bills while those that use up 200 kWh and 300 kWh will enjoy reductions of P62.76 and P94.14, respectively this month, according to Lawrence S. Fernandez, assistant vice president and head of utility economics of Meralco.

Households consuming 400 kWh monthly will see a reduction of P125.52 in their December power bills, Fernandez said by phone.

Meralco explained that the generation charge, which accounts for roughly 60 percent of the power bill, declined by 15 centavos per kWh to P5.47 per kWh due to the cheaper cost of power sourced from state-run National Power Corp. (Napocor), which provided 51 percent of the utility’s electricity requirements during the supply month of November.

This reduction, however, was slightly offset by the 4 centavo-per-kWh increase in the overall cost of electricity sourced from the so-called independent power producers (IPPs), because of the reduced dispatch (or output) of the 1,000-megawatt Sta. Rita and 500-MW San Lorenzo gas plants of the Lopez-led First Gas Holdings, as well as the coal-fed facility of Quezon Power Philippines Ltd.

The cost of power purchased from the IPPs, which accounted for 43 percent of the total power purchased by Meralco in November, would have been higher without the improved generating output and lower fuel costs of SEM-Calaca’s 600-MW coal-fed facility in Batangas.

The cost of power sourced from the Wholesale Electricity Spot Market (WESM) similarly rose by 52 centavos per kWh. The impact of this increase on Meralco customers was mitigated by a reduction in the distribution utility’s exposure to the spot market to only 6 percent during the supply month of November.

Meanwhile, Meralco also reported that the transmission charge to residential customers fell by 11 centavos per kWh due to the lower ancillary charges of National Grid Corp. of the Philippines, which currently operates the country’s transmission network.

Consequently, the lower generation and transmission charges resulted in a 4-centavo-per-kWh decrease in the system loss charge for this month.

The power firm stressed anew that it does not earn from the generation charge. Payments for the generation charge, which is a pass-through cost for Meralco, goes to the power producers such as Napocor, the IPPs and WESM, as the company’s own charges (in the form of distribution, supply and metering charges) account for only about 16 percent of the total electricity bill.

The rest of the pass-through costs also include transmission and taxes, among others.