Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges
Linemen install new electrical wires along a major thoroughfare in Quezon City. Meralco said the power rate reduction was a result of lower Wholesale Electricity Spot Market (WESM) prices. analy labor
Manila Electric Co. (Meralco) customers will enjoy lower power rates for the fifth consecutive month after the distribution firm announced Monday a reduction of P0.5260.
In a statement, Meralco said that a typical household consuming 200 kilowatts per hour (kWh) will enjoy a decrease of P105 in its total bill for the month of September.
The reduction represents a total downward adjustment of P1.52 per kWh since April 2019.
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Meralco said that the power rate reduction was a result of lower Wholesale Electricity Spot Market (WESM) prices, which dropped by P3.6503 mainly due to improved supply conditions in the Luzon grid.
Also contributing to the lower WESM rate was the refund of Net Settlement Surplus (NSS) as directed by the Energy Regulatory Commission on 1 August 2019. The share of WESM to Meralco’s supply needs increased by 17 percent.
Likewise, the cost of power supply agreements (PSA) declined by P0.1522 per kWh due to lower fuel prices.
On the other hand, cost of power from the Independent Power Producers (IPP) increased by P0.4844 per kWh because of lower average plant dispatch and weakening of the local currency as against the US dollar. Around 95 percent of IPP costs are dollar-denominated.
PSA and IPP provided 44 percent and 39 percent of Meralco’s supply needs, respectively.
This month, transmission charge for residential customers slightly increased by P0.0056 per kWh, offsetting taxes and other charges which decreased by P0.0886 per kWh.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 50 months, after these registered reductions in July 2015.
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 NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.
