Meralco rates to go down very slightly this February
By Myrna M. Velasco – February 10, 2023, 2:34 PM
from Manila Bulletin
There will be very marginal reduction of P0.0106 per kilowatt hour (kWh) in the electric bills of Meralco customers this month mainly due to the downtrend in the generation charge component of the unbundled electric bills.
The overall effective rate to be reflected in this billing cycle will be P10.8895 per kWh versus last month’s P10.9001 per kWh, according to the utility firm.
For the typical residential end-users with consumption of 200-kWh, the equivalent rate cut would be at least P2.00.
This is because the generation charge, which accounts for the biggest component in the overall pass-on tariff, had been pared by P0.2137 per kWh – and that now hovers at P6.9154 from the January billing of P7.1291 per kWh.
Conversely, the transmission charge and taxes logged slight net increase of P0.0108 per kWh, while the collection of feed-in-tariff allowance (FIT-All) as subsidy to eligible renewable energy (RE) projects remains suspended as previously decreed by the Energy Regulatory Commission.
In particular, Meralco explained that the main forces which precipitated the downswing in the generation charge had been the lower costs billed by the Wholesale Electricity Spot Market (WESM) and the cheaper costs invoiced by its contracted independent power producers (IPPs), that in turn, had provided cost offset to the higher charges of the utility firm’s power supply agreements (PSAs) with other generators.
“WESM charges decreased by P3.7370 per kWh as the supply situation in the Luzon grid improved with less generation capacity on outage, lower demand, and absence of yellow alerts,” Meralco stressed.
It similarly stated that the secondary price cap, which is typically the market signal for any run-up in power prices, was not triggered, “marking the first time since October 2021 that the cap was not imposed during a supply month. “
Meralco’s supply sourcing from the spot market had been at a considerably high volume of 16-percent last month, on account of the continuing wobbly status of its legally-impeded power supply agreements (PSAs) with SMC Global Power Holdings Corporation of the San Miguel group which cover roughly 1,000 megawatts of contracted capacity.
On its procurement with the IPPs, Meralco indicated that this declined by P0.2950 per kWh; primarily due to “lower natural gas prices after the quarterly repricing of Malampaya gas that reflected recent trend in international crude oil prices.”
Meralco added “the continued appreciation of the peso, which affected 95-percent of IPP costs that are dollar-denominated, also contributed to the reduction,” with the local currency ending January at its strongest level if reckoned from May last year.
For the PSA charges, the reported increase had been at significant P0.7970 per kWh “due to lower average plant dispatch,” plus Meralco’s emergency resort of supply sourcing from the Dinginin plant of the Aboitiz group to partly cover the ceased supply deliveries from the SMC-controlled plants.
The share of PSA-procured supply last month had been at 47 percent, while the capacity drawn from the contracted power producers had been at 37 percent.
