Meralco rates down in December as generation charges ease

The Manila Electric Co. (Meralco) on Monday announced a reduction in power rates for December following three consecutive months of upward adjustments, citing lower charges from the spot market and independent producers.

In an advisory, Meralco said it will lower its rates by 79.61 centavos per kilowatt-hour, bringing the overall rate for a typical household to P11.2584/kWh from P12.0545/kWh in November.

This will translate to a downward reduction of P159 for every 200 kWh consumed, P239 for 300 kWh, P318 for 400 kWh, and P398 for 500 kWh.

Meralco attributed the decline to a P0.6606 downward reduction in the generation charge to P6.5332/kWh from P7.1938/kWh, on the back of lower charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).

WESM charges fell by P2.7624/kWh due to improved supply in the Luzon Grid, while IPP charges went down by P0.4731/kWh due to the reduced use of more expensive liquid fuel and lower international coal prices.

Transmission charges also posted a net reduction of P0.1355/kWh, while the collection of the feed-in-tariff (FIT-All) allowance at P0.0364/kWh remains suspended as directed by the Energy Regulatory Commission (ERC).

In the same statement, Meralco cited a study conducted by the International Energy Consultants (IEC) which indicated that Meralco’s average tariff ranked 21st, and 3% below the global average in 2022 despite the 24% increase in the past five years.

“Notwithstanding this increase, all of the components of the regulated tariff are judged fair and reasonable by IEC, based on comparisons with other markets versus the underlying cost of electricity supply in Luzon,” the IEC was quoted as saying.

“Considering that the Luzon power market is unsubsidized, and the majority of the electricity is produced using imported fuel, Meralco appears to have done a very good job of minimizing tariff increases,” it added.

Meralco constructs, operates, and maintains electric distribution systems in the cities and municipalities of Bulacan, Cavite, Metro Manila, and Rizal, as well as certain areas in the provinces of Batangas, Laguna, Pampanga, and Quezon.

The firm counts as subsidiaries and associates Vantage Energy Solutions and Management Inc. and MeridianX Inc., acting as retail electricity suppliers in Luzon and the Visayas.

The company hiked its rates for the months of September, October, and November 2023.—AOL, GMA Integrated News