MANILA Electric Co. (Meralco) has announced on Thursday a P0.1252 per kilowatt-hour (/kWh) reduction in the overall electricity rate for a typical household in June, marking the second straight month of decline.
In a statement, the power distribution utility said the lower rate was mainly because of the decrease in the generation and transmission charges amounting to P0.1556/kWh. The drop more than offset a P0.0733 per kWh increase in the feed-in tariff allowance, or FiT-All.
“This is the second consecutive month of overall rate decrease,” the listed company said.
It said the adjustment would bring down the overall rate to P9.8789/kWh from May’s P10.0041/kWh.
The lower rate is equivalent to a decrease of around P25 in the bill of a residential customer consuming 200 kWh. Corresponding bill reductions for 300 kWh, 400 kWh and 500-kWh customers are P37.56, P50.08 and P62.60, respectively.
Meralco said the lower cost of power from its power supply agreements (PSA) largely brought down the generation charge for the month.
It said from P5.0523/kWh in May, the generation charge for June will go down to P4.9828/kWh.
“The reduction is the result of a P0.4420/kWh decrease in the cost of power from PSAs, mainly due to higher dispatch of Pagbilao Unit 1 and Ilijan Unit 1 as both returned to normal operations after undergoing scheduled maintenance,” the company said in its statement.
Of Meralco’s total requirement in the May supply month, PSA purchases accounted for 45%. Payment for the generation charge by electricity users goes to the power suppliers.
However, cost of power from the wholesale electricity spot market (WESM) and independent power producers (IPPs) increased by P0.1954 per kWh and P0.2266 per kWh, respectively.
“As demand for power in the Luzon grid grew by about 239 MW [megawatts], charges from the WESM increased due to higher effective rates of line rentals,” Meralco explained.
“Higher IPP charges, on the other hand, were driven by the weakening of the peso against the US dollar,” the utility said, adding that around 96% of IPP charges are dollar-denominated.
Power sourced from WESM and IPPs accounted for 15% and 40%, respectively, of Meralco’s May supply.
Meralco said that, except for the FiT-all, other charges decreased. Transmission charge to residential customers dropped by P0.0861/kWh due to lower power delivery and ancillary service charges from system operator National Grid Corporation of the Philippines. Meralco added that, with the lower generation and transmission charges, taxes and other charges fell P0.0429/kWh.
The higher FiT-All will be reflected in consumers’ electricity bills starting this month. The FiT-All rate will go up to P0.2563/kWh, after the Energy Regulatory Commission approved an increase of P0.0733/ kWh on the previous rate. FiT-All is a pass-through charge remitted to the National Transmission Corp. Calculated annually, the FiT-All is a uniform charge applied to the kilowatt-hours billed to consumers who are supplied with electricity through the country’s distribution or transmission network. The uniform charge is paid to developers of renewable energy plants. The FiT-All scheme was designed to jump-start development of new power sources such as wind, run-of-river hydropower, solar and biomass plants. — VVS