Typical households in Metro Manila will likely see a P7 cut in their power bills this month. — PHILIPPINE STAR/MICHAEL VARCAS

HOUSEHOLDS in Metro Manila can expect to see a P7 reduction in their power bills this month, after Manila Electric Company (Meralco) on Wednesday announced a cut in overall rates due to lower demand in the Luzon grid.

In a statement, the distribution utility said the December electricity rate fell by P0.0352 per kilowatt-hour (kWh) to P8.4753 per kWh from the November level. This is the lowest overall power rate since September 2017, Meralco added.

Typical households consuming 200 kWh will see a P7 cut in this month’s bills, while those consuming 300 kWh, 400 kWh and 500 kWh will see a reduction of P11, P14, and P18, respectively in their bills.

Meralco said the generation charge fell by P0.0502 per kWh to P4.1516 per kWh this month due to the P0.1881 per kWh reduction in charges from the Wholesale Electricity Spot Market (WESM) and a decline in demand from the Luzon grid.

“Luzon grid’s power supply situation improved in November following a drop in demand which decreased due to successive weather disturbances. From October 2020’s peak demand of 10,344 megawatts (MW), November 2020 peak demand decreased to 9,886 MW,” Meralco said.

The cost of power from Independent Power Producers (IPPs) slipped by P0.2577 per kWh because of improved average plant dispatch and the appreciation of the peso against the US dollar. Power Supply Agreement (PSA) charges also decreased by P0.0214 per kWh as the peso strengthened against the greenback.

WESM, IPPs and PSAs comprise 9%, 39% and 52% of Meralco’s energy requirements, respectively.

Transmission charges for residential customers slid by P0.0044 per kWh due to lower power delivery and ancillary service charges. Taxes and other charges logged a net increase of P0.0194 per kWh.

Meralco said that the collection of the Universal Charge – Environmental Charge of P0.0025 per kWh has been suspended, in accordance with the Energy Regulatory Commission’s (ERC) guidelines.

Meralco’s distribution, supply and metering charges remained unchanged for 65 months, following registered reductions in July 2015.

It 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 (National Grid Corporation of the Philippines). Taxes and other public policy charges like the Universal Charges and the FIT-All (Feed-In Tariff Allowance) are remitted to the government,” the company said.

Meralco said that it would continue to serve the public during the general community quarantine (GCQ), as its business centers will continue to process service applications, payments and other transactions.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang