Lower power rates ease Meralco consumer bills

Consumers can expect lower electricity bills for the second straight month this June as the Manila Electric Company (Meralco) slashes almost 11 centavos per kilowatt-hour (kWh) to the total rates​.

At a media briefing on Wednesday, Meralco Vice President and Head of Corporate Communications, Joe R. Zaldarriaga, said the adjustment brings the overall rate for a typical household down to P12.1552 per kWh from P12.2628 per kWh in May.

For households consuming 200 kWh, this translates to savings of around P22 in their monthly bill.

“Our customers will continue to benefit from lower power rates this month mainly due to lower generation charges,” Zaldarriaga said.

The main driver of the overall decrease is a lower generation charge, which dropped by P0.1099 per kWh to P7.3552 per kWh due to reduced costs from Power Supply Agreements (PSAs), Independent Power Producers (IPPs), and the Wholesale Electricity Spot Market (WESM).

Charges from PSAs and IPPs fell by P0.3699 and P0.1034 per kWh, respectively, attributed to lower fuel costs and higher average dispatch.

WESM rates also dropped by P0.6342 per kWh, thanks to improved supply conditions in the Luzon grid during the May supply month. A 533-megawatt reduction in average capacity on outage helped offset a 527-megawatt increase in demand.

For the billing period, PSAs accounted for 48 percent of Meralco’s total energy requirement, while IPPs and WESM contributed 33 percent and 18 percent, respectively.

The decrease in generation charges more than offset a P0.0214 per kWh increase in transmission charge, which rose due to higher ancillary service costs from the National Grid Corp. of the Philippines’ procurement agreements and the Reserve Market.

Other charges, including taxes, posted a net decrease of P0.0191 per kWh.

Pass-through charges for generation and transmission are remitted by Meralco to suppliers and the grid operator, while taxes and other regulated fees are forwarded to the government. Meralco’s distribution charge has remained unchanged since its P0.0360 per kWh reduction in August 2022.

According to Meralco, customers also continue to benefit from a distribution-related true-up adjustment that lowers rates by P0.2024 per kWh for residential users. Senior citizens consuming 100 kWh or less per month can also avail of a 5 percent discount on select components of their electricity bills.