Meralco forecasts lower January bills due to improved supply

By Gabriell Christel Galang – Jan 9, 2025 01:00 PM
from Manila Bulletin

Manila Electric Company (Meralco) customers can breathe a sigh of relief as the power retailer forecasted lower electricity rates for January, citing improved supply conditions and lower generation costs.

Joe Zaldarriaga, Meralco’s Vice President and Head of Corporate Communications, said on Thursday, Jan. 9, that a possible decrease in the generation charge is expected due to lower prices in the Wholesale Electricity Spot Market (WESM) and an improved supply in the Luzon grid.

The grid surplus is due to reduced average peak demand and lower average capacity during December.

“We expect this month’s lower generation charge to lead to an overall rate reduction in this month’s electricity rates,” Zaldarriaga stated.

Last month, the Independent Electricity Market Operator of the Philippines (IEMOP) reported a significant reduction in the average price for December billing, from P4.42 per kilowatt-hour (kWh) to P3.99 per kWh.

Demand by year-end 2024 saw a slight increase from 13,659 megawatts (MW) to 13,692 MW, while the average supply grew to 20,064 MW.

In Luzon, the average WESM rate in December dropped by 10.6 percent to P3.79 per kWh, with a four percent increase in its average supply to 14,191 MW.

Consequently, Meralco’s electricity rate for December increased by P0.1048 per kWh, bringing the overall rate for a typical household to P11.9617 per kWh.

WESM prices dropped in December

Last month, the Independent Electricity Market Operator of the Philippines (IEMOP) noted a significant increase in the system-wide average supply in December to 20,150 megawatts (MW), while average demand fell by 2.8 percent to 13,275 MW.

Subsequently, the average price declined by 21.9 percent to P3.45 per kilowatt-hour (kWh).

Luzon’s supply increased to 14,193 MW or 4 percent, while demand stood at 9,344 MW. This resulted in a P3.26 per kWh pricing, a 23 percent decline.

Visayas also posted an increase in its supply to 2,485 MW, while the decline went to 1,942 MW. The average price for the region weighed P3.87 per kWh from P4.82.

While there has been a minimal increase in Mindanao’s supply to 3,473 MW, demand dropped by 2 percent to 1,989 MW.

The region’s average price registered a substantial 20 percent drop to P3.88 per kWh.

“Compared with the previous month, total energy generated (GWh) decreased by 6.3 percent from 9,867 GWh in November to 9,245 GWh in December,” IEMOP stated.

Coal had the largest generation contribution at 58.9 percent, Renewable energy (RE) generators came second as it was able to contribute 24.5 percent due to wind power plants, while natural gas had a 15 percent contribution.