Dominant power distributor Manila Electric Company (Meralco) announced a P0.3598 per kWh reduction in power rates, from last month’s P8.6793 to P8.3195 per kWh this March, bringing the overall rate cut to a total of P0.4302 from two successive months of decrease in energy charges. This month’s adjustment is equivalent to a decrease of around P72 in the total bill of residential customers consuming 200 kWh.
And yes, this also highlights the data showing that Metro Manila residents, including areas in the Meralco franchise sphere to enjoy one of the lowest power rates across the country.
Contrary to unverified claims by militant groups, Meralco logged as one of the lowest rates in the country ranking 77th at 7.85 per kWh, with far lower rates than majority of coops and distribution utilities. Davao at 76th registered a slightly higher cost at 7.86. This was based on a recent Sun Star Cebu report citing regulatory data from the Energy Regulatory Commission (ERC).
However, with the bigger rate slash by the power distributor, it is unclear if the country’s largest power distributor will further slide in ranking in terms of high rate.
According to the ERC data, the franchise area of the Camiguin Electric Cooperative has the highest electricity rate at P13.47/kwh, followed by the Pampanga Electric Service Cooperative which sells electricity to its customers at P13.33/kwh, and Lubang Electric Cooperative, which charges P12.00/kwh.
Surprisingly, big cities in other Philippine regions pay more than their counterparts in the Metro. Customers in Cagayan de Oro are paying the Cepalco P10.04/kwh. Cepalco ranks 15th place, with Bacolod City at 38th with P8.97/kwh, while Iloilo City ranks 47th with P8.80/kwh average.
Meralco’s rates have been going down constantly to their lowest levels in years since last year.
This owes, among a host of many other factors, to the downward trend in generation charge.
Indeed, the average power retail rate of the power distributor recorded its lowest level in 2020.
Meralco First Vice President and Regulatory Management Head Atty. Jose Ronald V. Valles reported in a press briefing last week that the average retail rate clocked in at P7.96 per kilowatt- hour (kWh) in 2020, representing a 10-percent decline from the P8.87/kWh registered in 2019.
A very significant reduction in overall power demand brought about by businesses shutting down during the ECQ in the early part of the year, with Meralco invoking the Force Majeure provision in its Power Supply Agreements to reduce the fixed charges from power suppliers.
The implementation of the power supply agreements which were concluded under the competitive selection process is also a factor, as well as lower Wholesale Electricity Spot Market prices, the appreciation of the Philippine peso against the US dollar, and lower fuel prices and typhoon destructions.
The drop in electricity rates, particularly from the decline in generation charges, resulted in some P14 billion in savings to Meralco customers. A feat that will make Metro Manila energy customers envied by their counterparts across the country.
According to Meralco, generation charges fell 16.1 percent due to the implementation of new power supply agreements (PSA) that provided P8.4 billion savings to consumers and slashed the average system loss charge by 12.6-percent.
Also accounted for the drop were the lower Wholesale Electricity Spot Market (WESM) prices and the peso appreciation, as well as the invocation of Force Majeure claims during the community quarantine that slashed fixed costs and charges from temporary suspension of mid- merit supply contracts. The latter resulted in consumer savings of up to P2.4 billion.
In addition, Meralco provided as much as P3.2 billion payment relief to customers who were unable to meet their guaranteed minimum billing demand.
During the same period, there was a 6.2-percent increase in transmission charges as compared with the year prior due to higher power delivery service and ancillary service charges, as well as lower average system load factor because of the community quarantine.
“We see the lower rates last year as hopefully relief for our consumers, especially during these trying times. We hope that the lower power costs as projected this month will further provide assistance to our customers in so far as their power bills are concerned,” Meralco Vice President for Corporate Communications and Spokesperson, said.
No disconnection policy
Always considerate of the financial conditions of its customers, Meralco has also deferred its disconnection notice for quite some time, the primary concern of the power distribution firm being to ensure that the public has a sufficient and steady supply of electricity to “keep the lights on.”
Meralco President and CEO Ray C. Espinosa also assured the public that “all hands are on deck to ensure Meralco runs like clockwork. Our company continues to keep up the good fight and sustains our mission to keep the lights on for each and every single customer in our franchise area. Going beyond the power and light we deliver this current crisis that our country faces calls for us to be a beacon of reliability and hope. We are keeping the lights on for our customers as we also provision for the safety and comfort of our employees.”
“We may be living in uncertain times, but one thing is for sure. Meralco will continue working 24/7 to keep our customers’ lights on, and provide reliable electricity at lower rates,” Meralco spokesman Joe Zaldarriaga said.