AFTER RISING for three straight months, electricity rates will go down by P0.2728 per kilowatt-hour (/kWh) in May, resulting in a P55 reduction for the monthly bill of a typical household consuming 200 kWh, Manila Electric Co. (Meralco) announced on Tuesday.

The country’s biggest power distributor said that overall power rates will dip this month to P10.2866/kWh from April’s P10.5594/kWh largely because of a lower generation charge.

For those consuming 300 kWh, 400 kWh and 500 kWh, the reduction translates into cuts of P81.84, P109.12 and P136.40, respectively, in their monthly bills.

“From P5.6322/kWh last month, generation charge for May went down to P5.5508/kWh, a decrease of P0.0814/kWh,” Meralco said.

It attributed the decrease in generation charge mainly to lower charges from independent power producers (IPPs) and power supply agreements (PSAs).

The cost of power from these sources decreased by P0.7544/kWh and P0.5143/kWh, respectively.

Meralco said the decline was due to the strengthening of peso against the US dollar and lower prices for coal and Malampaya natural gas.

“About 98% of IPP charges and 72% of PSA charges are dollar-denominated. The price of natural gas from Malampaya, which accounts for about 64% of Meralco’s supply, decreased this month as a result of quarterly repricing to reflect lower crude oil prices in the world market,” the company said.

IPPs and PSAs accounted for 43% and 45% of Meralco’s supply requirements, respectively.

Charges from the Wholesale Electricity Spot Market (WESM) rose by P3.5355/kWh because of tight supply conditions in Luzon that triggered seven yellow alerts and seven red alerts declared by the National Grid Corporation of the Philippines during the April supply month. WESM provided 12% of Meralco’s supply needs, the utility said in its statement.

The transmission charge for residential customers dropped by P0.0808/kWh due to higher system load factor, while taxes and other charges slipped by P0.1106/kWh.

Meralco said its distribution, supply, and metering charges had remained unchanged for 46 months, after these registered reductions in July 2015. — VVS

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