Meralco customers will see lower power bills this September after the company announced a rate cut, driven by a drop in generation charges.
The Manuel V. Pangilinan-led distribution utility said rates will go down by P0.1852 per kilowatt-hour (kWh), bringing the new rate to P13.0851 per kWh from last month’s P13.2703 per kWh.
According to Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga, the rate decrease translates to a P37 reduction in the electricity bill of a typical household consuming 200 kWh. For households consuming 300, 400, and 500 kWh, the rate adjustment translates to savings of around P56, P74, and P93 on their electricity bills, respectively.
“We hope that, along with relatively lower consumption during this period, this rate cut will bring relief to our customers,” he said.
Lower generation charge drives overall rate reduction
This month’s rate reduction was primarily driven by a decrease in the generation charge, which fell by P0.2603 per kWh due to lower costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).
Charges from IPPs dropped by P1.3459 per kWh, while PSA charges fell by P0.3660 per kWh, driven by the appreciation of the local currency against the US dollar and lower international fuel prices. The stronger Peso affected around 99 percent of IPP costs and 57 percent of PSA costs that were dollar-denominated.
These decreases more than offset the higher Wholesale Electricity Spot Market (WESM) charges, along with the start of contract price adjustment collections from Sual Power, Inc. (SPI) and South Premiere Power Corporation (SPPC).
WESM charges increased by P0.3785 per kWh, as average demand in the Luzon grid and average capacity on outage increased by 182 MW and 132 MW, respectively.
Meanwhile, the implementation of SPI and SPPC’s contract price adjustments follows the Supreme Court’s ruling that affirmed the right to invoke the “Change in Circumstance” clause of their supply agreements and allowed the generation companies to collect price adjustments to reflect additional fuel costs.
As a result, the Energy Regulatory Commission approved a total amount of P5.1 billion to be collected over a period of six (6) months, starting this September. This is around P0.26 per kWh for this month.
PSAs, IPPs, and WESM accounted for 65%, 29%, and 6%, respectively, of Meralco’s total energy requirement for the period.
Other billing components and updates
Meanwhile, the transmission charge, another pass-through component of the electricity bill, increased by P0.1130, primarily due to higher ancillary service costs from the Reserve Market.
Meanwhile, other charges recorded a net decrease of P0.0379 per kWh. Pass-through charges for generation and transmission are paid by Meralco to power suppliers and the grid operator, respectively, while taxes, universal charges, and the Feed-in Tariff Allowance are all remitted to the government.
Meralco reiterated that its distribution charge has stayed unchanged since the P0.0360 per kWh reduction for a typical residential customer in August 2022. In addition, customers continue to benefit from an ongoing distribution-related true-up adjustment, equivalent to another P0.2024 per kWh reduction.
Safety during the rainy season
As the rainy season continues, Meralco is also reminding customers to prioritize electrical safety, especially in flood-prone areas.
“Switch off the main electrical power switch or circuit breaker in case of flooding, keep hands dry when touching electrical appliances, and always have drenched outlets or appliances checked by a licensed electrician before using,” Zaldarriaga advised.
He stressed that simple precautions can prevent accidents and save lives during storms and heavy rains.
Embracing energy efficiency
Beyond rate reductions, Meralco is encouraging customers to take control of their electricity use by embracing energy efficiency as a way of life.
“Among the practical tips customers can practice are regular cleaning of air conditioner filters and electric fan blades, ironing clothes in bulk, refraining from overfilling refrigerators, and using LED bulbs for cost-saving lighting,” Zaldarriaga said.
To better manage their electricity bills, customers can also use the Meralco Appliance Calculator, which shows the energy consumption of household gadgets and appliances.
Customers can also take advantage of Meralco’s digital channels, including the My Meralco app and official social media accounts, to report any electricity service concerns. Traditional channels, such as the Meralco hotline 16211, also remain available.