Meralco Lowers Rates in April, All Set for Demand Spike During Dry Season

Meralco Lowers Rates in April, All Set for Demand Spike During Dry Season | Daily Tribune

Even before the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) declared the official start of dry season in the country, Filipinos already feel the hot and humid weather.

Historically, electricity consumption increases during this season, driven by longer and more frequent use of cooling appliances to beat the heat.

On top of increasing demand, there is also pressure on the power grid due to tightness of supply which is partly caused by less capacity produced by hydropower plants.

As such, the energy industry faces the crucial task of managing the situation to ensure that there is sufficient supply to power the economy, and the consumers.

Meralco, the country’s largest distribution utility, has been on its toes to ensure sufficient and stable supply that will meet the increasing demand from its 7.8 million customers. The company actively implements measures to minimize the likelihood of power interruptions, thereby providing a stable and reliable energy supply.

A timely relief for consumers is Meralco’s recent announcement on the significant reduction in its overall rate for April, as it proactively campaigns for demand-side management practices.

Lower rates for April

Just recently, Meralco announced a reduction of almost one peso or P0.9879 per kilowatt hour (kWh) in the April electricity rate, bringing the overall rate for a typical household down to P10.9518 per kWh from P11.9397 per kWh in March.

For residential customers consuming 200 kWh, the adjustment is equivalent to a decrease of around P198 in their total electricity bill. The substantial reduction this month wiped out rate increases since January 2024, bringing the year-to-date adjustment to a net decrease of P0.3066 per kWh.

The overall reduction was driven mainly by sharp decreases in the generation and transmission charges.

The generation charge had a reduction of P0.3613 per kWh owing to lower costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) that offset the increase in Wholesale Electricity Spot Market (WESM) charges.

The transmission charge, meanwhile, went down by P0.4665 per kWh following the Energy Regulatory Commission’s suspension of settlements in the Reserve Market that drove the significant increase in ancillary service charges in the March electricity rates.

“The significant reduction in this month’s overall electricity rate more than wiped out the increases in power rates for the first quarter of the year. Despite the rate reduction, Meralco continues to encourage its customers to continue practicing energy efficiency especially during summer when consumption historically increases anywhere from 10 to 40 percent due to warmer temperatures,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said.

Ensuring 24/7 power supply

Collaboration with the government also forms a big part of Meralco’s efforts to ensure 24/7 supply to its customers.

“We are in constant coordination with the Department of Energy (DOE) to ensure the delivery of stable, reliable, and continuous electricity service to customers during the summer months,” Zaldarriaga said.

The company proactively obtains additional power supply via the conduct of government-mandated competitive selection process (CSP) to meet the customers’ growing electricity demand.

In anticipation of the spike in demand this dry season, Meralco secured an additional 400-megawatt (MW) interim power supply after a recently concluded CSP.

This is in line with Meralco’s goal of providing the least-cost supply to its customers, especially during the critical dry months when demand is high, and supply is low. This move will help Meralco reduce its reliance on the WESM, where prices can be highly volatile.

Meralco is also seeking suppliers for another interim power supply of 260 MW to address its peaking requirements during the dry season.

“We remain steadfast in our commitment to deliver continuous and stable power supply to our 7.8 million customers at the least cost possible,” Zaldarriaga said.

Advocating for active ILP participation

In the spirit of bayanihan, the power distributor also highlights the importance of collective action and called for increased participation in the government’s Interruptible Load Program (ILP).

The ILP is an energy demand-side management program that aims to reduce strain on the grid by encouraging large-load customers to use their generator sets or reduce their operations during instances of Red Alert or when supply is insufficient to meet the demand. This helps to spare households from power interruptions.

Meralco is urging businesses and industrial establishments to collectively participate in the program to alleviate the strain on the grid.

Currently, over 100 companies are enrolled in the ILP within the Meralco franchise, equivalent to around 500 MW of total de-loading capacity.

Meralco continues to advocate for expanded participation in the program and is encouraging more participants through engagement initiatives.

Promoting energy efficiency as a way of life

The power distributor also works hand-in-hand with the DOE in empowering consumers to continuously practice energy efficiency to help them better manage their electricity consumption and to safeguard a sufficient and stable power supply.

This is in line with Republic Act 11285, also known as the Energy Efficiency and Conservation Act, which institutionalizes energy efficiency and conservation as a national way of life.

Part of Meralco’s advocacy to help its customers embrace energy efficiency is to empower them by providing knowledge and tools they can use, especially during the dry season.