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Lower generation charge brings down September electricity rates–Meralco

POWER rates for September dropped by P0.57 per kilowatt- hour (kWh) on account of a lower generation charge last month.

The Manila Electric Co. (Meralco) said on Monday that residential customers with an average monthly consumption of 200 kWh will enjoy a P113.46 reduction in their electricity bills compared to last month; P170.19 for a 300-kWh consumption; P226.92 for 400 kWh; and P293.65 for 500 kWh.

This month’s reduction, Meralco said, brings the total reduction to P2.13 per kWh over the past five months. This reduction also marks the seventh time this year that rates have gone down.

“At P8.55 per kWh, this month’s overall rate is lower by P1.81 compared to September 2014’s P10.36 per kWh,” said Meralco, adding that “this is the lowest in more than five years or since January 2010.”

The lower rate was mainly on account of a decline in generation costs from power sales agreements (PSAs) and independent power producers (IPPs) due to higher dispatch, Meralco said.

Generation charge, the largest component of a Meralco bill, decreased by P0.42 per kWh from last month. At P4.13 per kWh, this September’s generation charge is also the lowest since January 2010.

Several large generating units, namely, South Premiere Power (Ilijan), Sem-Calaca Power, Quezon Power and Therma Luzon (Pagbilao) improved their dispatch levels in August after experiencing plant outages during the July 2015 supply month.

In particular, Ilijan increased dispatch level from only 48 percent in the July supply month to 81 percent in August. Ilijan 1 was on a scheduled maintenance in July, while Ilijan 2 was derated during the Malampaya gas restriction from July 13 to 16.

Meanwhile, lower fuel costs from Malampaya brought down prices from the First Gen plants-Santa Rita and San Lorenzo.

Apart from the lower generation costs, Meralco said there was an adjustment-cover cost deductions from Malampaya, following the supply restrictions from previous months from prior months that helped further bring down the generation charge for September.

Charges from the Wholesale Electricity Spot Market (WESM), on the other hand, registered a negligible increase of P0.006 per kWh.

As such, the share of PSAs, IPPs and WESM to Meralco’s total power requirements, meanwhile, were at 47 percent, 46 percent and 7 percent, from the previous month’s levels of 43 percent, 46 percent and 11 percent, respectively.

In addition to the generation charge, transmission charge also registered a reduction of P0.04 per kWh due to lower power delivery service and ancillary service charges. Taxes and other charges, likewise, went down by P0.05 per kWh and P0.06 per kWh, respectively.

Meralco’s distribution, supply and metering charges remain unchanged after registering reductions in July.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines.

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