Meralco lowers power rates anew in February

Customers of the Manila Electric Co. (Meralco) may look forward to lower electricity bills this February as the power distributor slashed anew electricity rates for the second straight month.

JUST IN: Meralco announced power rate cut of P0.5900 per kilowatt hour in February. This translates to an overall rate of P8.8623 per kWh, lower than last month’s P9.4523 per kWh. | via @Ted_Cordero

— GMA News (@gmanews) February 6, 2020

In a press conference in Pasig City on Thursday, Meralco spokesperson Joe Zaldarriaga announced that the distribution utility will implement a P0.5900 per kilowatt hour (kWh) reduction in its power rate this month.

This brings the overall rate to P8.8623 per kWh, lower than January’s P9.4523 per kWh rate.

This is also Meralco’s lowest rate in two years, according to Zaldarriaga. It is also lower than that of February 2010’s rate of P9.0331 per kWh.

The P0.59 per kWh reduction translates to a decrease of P118 in a typical household’s, consuming 200 kWh, electricity bill.

“The reduction is mainly due to a lower generation charge after the implementation of new Power Supply Agreements (PSAs) starting last December 26,” Zaldarriaga said.

“These PSAs were secured after a successful competitive selection process (CSP) under the guidance of the Department of Energy (DOE) and the expeditious provisional approval of the Energy Regulatory Commission (ERC),” he said.

The back-to-back months of rate decrease to start the year total P1.00 per kWh and goes against the usual trend of February rates adjusting upward due to price normalization after reconciliation of outage allowances, as seen in the previous five years, according to the Meralco official.

From P4.9039 per kWh last month, the generation charge for February decreased to P4.5090 per kWh, a reduction of P0.3949 per kWh.

The new baseload PSAs—with San Miguel Energy Corporation, South Premiere Power Corporation, and AC Energy—registered a significantly lower generation cost of P4.0372 per kWh average and contributed 21% to Meralco’s supply requirements.

Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) also decreased this month, driven by lower power demand and improved supply conditions in the Luzon grid.

The WESM rate for February is P3.0529 per kWh. The share of WESM to Meralco’s supply needs increased to 23%.

The WESM rate offset the cost of power from Meralco’s Independent Power Producers (IPPs) and old PSAs, which increased by P0.7429 per kWh to P5.2920 per kWh, mainly due to lower average plant dispatch resulting from the scheduled outage of Quezon Power and First NatGas-San Gabriel from January 17 to 25 and January 4 to 23, respectively.

The IPPs and old PSAs accounted for 56% of Meralco’s total supply.

Meanwhile, taxes and other charges registered a decrease of P0.2839 per kWh.

The Feed-In-Tariff Allowance (FIT-All) went down by P0.1731 per kWh after the ERC approved a lower FIT-All rate of P0.0495 per kWh as compared with the previous subsidy of P0.2226 per kWh.

There was also a P0.0543 per kWh reduction in the Universal Charge after PSALM said that it completed the collection of National Power Corporation’s stranded contract cost recovery.

These cushioned the impact of a P0.0888 per kWh increase in the transmission charge for residential customers, which was a result of higher National Grid Corporation of the Philippines ancillary service charges.

Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 55 months, after these registered reductions in July 2015.

Meralco operates and maintains the electric distribution system in the cities and municipalities of Bulacan, Cavite, Metro Manila, and Rizal and certain cities, municipalities, and barangays in the provinces of Batangas, Laguna, Pampanga, and Quezon. — BM, GMA News