Meralco rates down anew in September on improved supply, NSS refund
By Lenie Lectura -September 10, 2019
from Business Mirror
THE Manila Electric Co. announced Monday that overall electricity rates decreased to P9.0414 per kilowatt-hour this month from last month’s P9.5674 per kWh, mainly due to improved power supply and a refund of net settlement surplus (NSS).
The downward adjustment of P0.5260 per kWh will mean a decrease of around P105 in the typical household consuming 200 kWh.
This is the fifth consecutive month of a power rate decrease. Since April this year, consumers enjoyed a reduction of almost P1.52 per kWh.
Generation charge, which makes up bulk of what consumers pay for their electricity, went down to P4.5191 per kWh for September from P4.9620 per kWh last month.
The generation charge decrease is primarily due to lower charges from the Wholesale Electricity Spot Market, the country’s electricity trading floor. The share of WESM to Meralco’s supply needs went up to 17 percent.
WESM charges decreased by P3.6503 per kWh mainly due to improved supply conditions in the Luzon grid. There were no incidents of yellow or red alerts during the whole supply month as compared to nine yellow alerts in July.
NSS refund
Contributing to the lower WESM rate is the refund of NSS by the Energy Regulatory Commission, which found inconsistencies in how the Philippine Electricity Market Corp. allocated the NSS from June 2018 to May 2019. It ordered PEMC to refund a total of P1.774 billion.
Of the amount, P1.08 billion will be refunded to Meralco customers; P321.96 to customers of other distribution utilities and electric cooperatives; and the remaining P371 million to generation companies, retail electricity suppliers and directly-connected customers.
Cost of power from the power supply agreements (PSAs) decreased by P0.1522 per kWh due to lower fuel prices. On the other hand, cost of power from the Independent Power Producers increased by P0.4844 per kWh because of lower average plant dispatch and weakening of the peso against the US dollar. Around 95 percent of IPP costs are dollar-denominated.
PSAs and IPPs provided 44 percent and 39 percent of Meralco’s supply needs, respectively.
Transmission charge for residential customers, meanwhile, went up by P0.0056 per kWh. This, however, was offset as taxes and other charges went down by P0.0886 per kWh.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 50 months. The country’s largest power distribution firm 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 National Grid Corp. of the Philippines. Taxes and other public policy charges like the FiT-All rate are remitted to the government.
