ASEAN KEY DESTINATIONS
Lower electricity rates expected this January
Consumers can look forward to cheaper electricity bills at the end of the month as Meralco announced another price cut in its rates this January.
The power distributor says a P0.5260 per kWh decrease in electricity rates will be implemented this month. For a typical household consuming 200kWh, that’s a reduction of around P105 in the total bill.
The latest price cut, which Meralco attributes to a P0.5277 per kWh reduction in the generation charge, marks the second consecutive month the company decreased its overall electricity rates.
Lower PSAs and WESM charges bring down the generation charge
Generation charge decreased from P4.6045 per kWh in December to P4.0768 per kWh this January primarily due to lower Power Supply Agreements (PSA) and Wholesale Electricity Spot Market (WESM) charges.
Charges from PSAs registered a decrease of P0.9810 per kWh. The lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission (ERC). The reduction in capacity fees of generator companies represents savings immediately passed on to consumers by way of lower electricity rates. The capacity fees from PSAs will return to normal levels after the downward adjustment this month. PSAs provided 40% of Meralco’s total energy requirement.
Charges from the WESM also decreased by P1.6943 per kWh due to lower spot prices resulting from a reduction in power demand in the Luzon grid. The share of WESM purchases to Meralco’s total requirement this month was 19%.
On the other hand, charges from the Independent Power Producers (IPPs) increased by P0.3808 per kWh due to lower average plant dispatch. The share of IPP purchases to Meralco’s total requirement this month was at 41%.
Increase in transmission charge offset by other charges
Transmission charge of residential customers increased by P0.1168 per kWh due to higher NGCP ancillary service charges, but this was offset as taxes and other charges went down by P0.1151 per kWh this month.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 30 months, after these registered reductions in July 2015. Meralco has 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 are collected by government.
Meralco provides energy efficiency tips for customers
As summer approaches, Meralco once again encourages its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy such as unplugging appliances when not in use to avoid so-called “phantom load,” maintaining the air-conditioner at mid-setting or at 25 degrees Celsius for maximum efficiency, using a power board or strip, maximizing natural light during daytime, and keeping appliances well maintained to ensure optimal performance. For more helpful tips, customers may visit Meralco’s website at www.meralco.com.ph or its social media accounts, Twitter @meralco and Facebook at www.facebook.com/meralco.
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