This adjustment brings the overall household rate to P13.0851 per kWh from last month’s P13.2703.
For residential customers consuming 200 kWh, they will see a reduction of P37 in their total electricity bill.
“We hope that along with relatively lower consumption during this period, this rate cut will bring relief to our customers,” said Joe R. Zaldarriaga, Meralco vice president and head of corporate communications.
Generation charge decline offsets WESM hike
The overall reduction was primarily due to a P0.2603 per kWh drop in the generation charge, driven by lower costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).
Charges from IPPs went down by P1.3459 per kWh.
PSAs dropped by P0.3660 per kWh.
Meralco attributed the decline to the appreciation of the peso against the dollar and a decrease in global fuel prices. Roughly 99 percent of IPP costs and 57 percent of PSA costs are dollar denominated, making them sensitive to currency fluctuations.
These declines helped offset the P0.3785 per kWh increase in Wholesale Electricity Spot Market (WESM) charges. WESM rates rose as average demand in the Luzon grid increased by 182 MW, while capacity on outage climbed by 132 MW.
Contract price adjustments add costs
Meralco also began implementing the contract price adjustments of Sual Power, Inc. (SPI) and South Premiere Power Corp. (SPPC) this month.
The adjustment follows a Supreme Court ruling affirming the companies’ right to invoke the “Change in Circumstance” clause in their supply agreements. The Energy Regulatory Commission approved the collection of P5.1 billion over six months, or around P0.26 per kWh this month, to cover higher fuel costs.
For the period, PSAs, IPPs, and WESM supplied 65 percent, 29 percent, and 6 percent of Meralco’s total energy requirement.
Transmission and other charges
Transmission charges, another pass-through cost, rose by P0.1130 per kWh, mainly due to higher ancillary service fees from the Reserve Market.
Other charges, including taxes, recorded a net decrease of P0.0379 per kWh. Meralco emphasized that pass-through charges for generation and transmission are remitted to suppliers and the grid operator, while taxes and universal charges go to the government.
Meralco reiterated that its distribution charge has remained unchanged since August 2022, when it was reduced by P0.0360 per kWh. Customers also continue to benefit from the ongoing implementation of a distribution-related true-up adjustment equivalent to a reduction of P0.2024 per kWh. —Ed: Corrie S. Narisma
