Power rates this month will go down by P0.5260 per kilowatt-hour (kWh), the second consecutive month of decrease in overall electricity rates.
The Manila Electric Co. (Meralco) said on Wednesday overall power rates for January is at P8.7227 per kWh from last month’s P9.2487 per kWh. The rate decrease this month amounts to around P105 reduction in the total bill of a typical residential customer consuming 200 kWh.
The lower January rate is mainly due to a P0.5277-per-kWh reduction in the generation charge, which decreased from P4.6045 per kWh in December last year to P4.0768 per kWh in January this year, primarily due to lower power-supply agreements (PSA) and Wholesale Electricity Spot Market (WESM) charges.
Charges from PSAs registered a decrease of P0.9810 per kWh. The lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission. The reduction in capacity fees of generator companies represents savings immediately passed on to consumers by way of lower electricity rates. The
capacity fees from PSAs will return to normal levels after the downward adjustment this month. PSAs provided 40 percent of Meralco’s total energy requirement.
Charges from the WESM also decreased by P1.6943 per kWh due to lower spot prices resulting from a reduction in power demand in the Luzon grid. The share of WESM purchases to Meralco’s total requirement this month was 19 percent.
On the other hand, charges from the independent power producers (IPPs) increased by P0.3808 per kWh due to lower average plant dispatch. The share of IPP purchases to Meralco’s total requirement this month was at 41 percent.
Meanwhile, the National Electrification Administration (NEA) said electricity consumers in the provinces who are being supplied by different electric cooperatives (ECs) need not worry about the new excise tax imposed on coal, saying the impact on power rates is only “minimal.”
NEA Administrator Edgardo Masongsong said the price adjustments, which will be reflected starting in March, will be nominal because not all distribution utilities and ECs derive their energy sources from coal.
“On the average, those who consume 136 kilowatt hours will be charged about P680 to P700. The impact of excise tax on them will be about 70 centavos only,” Masongsong said.
Out of the 121 ECs operating in the country, 74 are purchasing energy from coal-fired power plants, of which only 47 are using more than 50 percent for their electricity requirement.
He attributed this to the fact that a lot of power cooperatives are gradually making their transition into renewable energy, such as solar, hydro, wind or even biomass, in line with the thrust of the government.
Still, Masongsong said, his office will remain on the watch for ECs that might take advantage of the higher coal-excise tax to jack up electricity rates, considering that 30 percent to 35 percent of their baseload comes from this fossil-fuel source.