POWER distributor Manila Electric Co. (Meralco) reported that average retail rates declined by around 3% in the six months to June as generation charges fell.
Meralco registered an average retail rate of P7.92 per kilowatt hour (kWh) in the first half, a P0.27 per kWh drop from the P8.19 per kWh year on year, said its First Vice-President and Regulatory Management Head Jose Ronald V. Valles in a statement issued on Wednesday.
Generation charges, which made up more than half or 57% of the total retail price during the period, decreased by 1.3% to P4.5 per kWh due to a decline in charges from the spot market, lower fuel prices and the local currency’s appreciation.
Transmission charges, which accounted for 9% of the total retail price in the first half, fell by 7.5% to P0.73 per kWh as the firm implemented a refund of its transmission over-recoveries between January and April.
Meralco explained that lower ancillary service charges also led to a decline in transmission rates.
System losses, which took up 3% of the retail price, went down by 6% to P0.28 per kWh in the first half.
“Distribution charges, on the other hand, inched up by only 0.1% as residential sales continued to increase brought about by the imposition of enhanced community quarantine,” the company said.
The continued rollout of the firm’s P13.9-billion distribution rate true-up refund tempered retail rates as well, according to the distribution utility. The refund was implemented beginning March.
In the six months ending June, subsidies, taxes and universal charges were lower by 5.8% to P0.85 per kWh year on year due to lower effective taxes.
However, the feed-in tariff allowance (FiT-All), which comprised 1% of the retail rate, rose by 61% due to a FiT-All rate hike of P0.0488 per kWh starting January.
The FiT-All is a uniform charge included in the bills of electricity customers. It is collected by distribution utilities, the National Grid Corp. of the Philippines, and retail electricity suppliers, while the payments are remitted to the FiT-All fund held by the National Transmission Corp.
The country’s largest private sector distribution utility previously reported that its core net income rose by 8% to P11.4 billion in the first half year on year after registering higher revenues from its joint venture project San Buenaventura Power Ltd.
Shares in Meralco shed 1.84% or P5 to close at P267 apiece on Wednesday. — Angelica Y. Yang
