Meralco rates marginally lower in July billing

Despite the electricity demand spike last month, the overall electricity rate to be billed by power utility giant Manila Electric Company (Meralco) is marginally down by ₱0.0286 per kilowatt-hour (kwh) in the July billing of customers at ₱8.6966 per kwh from the previous month’s P8.7252 per kwh.

Initial projections that had just been anchored on generation charge was supposedly an increase for this month’s billing cycle, but the final result was fortunately a downward adjustment which is a favorable outcome for Meralco’s more than 6.0 million customers.

Meralco Spokesperson Joe Zaldarriaga indicated there was a “surprise twist of rate reduction” because of the continuing force majeure (FM) claims that the company has been invoking on its power suppliers.

For consumers in the typical 200-kwh usage bracket, the overall cost reduction in their bills will be ₱6.00 in this billing cycle.

“Without the FM claims, the total rate would have increased by ₱0.0717 per kwh from last month’s rate. For the past four months, the savings from FM claims totaled ₱1.85 billion,” the utility firm emphasized.

The generation charge, which accounts for the bulk of the pass-on cost item in the Meralco bill had been flattish – or just down by ₱0.0069 per kwh from ₱4.3344 per kwh last month. This is already the fourth month in the series of reduction in the generation charge that’s being passed on in the electric bills since the start of the year.

For Meralco’s force majeure claims this July, it noted that such hovered at ₱265 million and resulted in customer savings of ₱0.0877 per kwh as reflected in the generation charge.

“This represents avoided charges from the temporary suspension of mid-merit supply contracts recently approved by the Energy Regulatory Commission,” Meralco said.

Adjustments in other charges, primarily the transmission charge was also lower by ₱0.0426 per kwh for the ancillary services procurement of the National Grid Corporation of the Philippines; and that somehow offset the ₱0.0209 per kwh net increase in taxes and other charges.

Specifically, it was noted that charges from the Wholesale Electricity Spot Market had been lower by ₱1.7803 per kwh; and that was mainly attributed to reduction in line rental cost related to Meralco’s supply contracts.

The utility firm’s supply purchases from its contracted independent power producers (IPPs) had been higher by ₱0.4354 per kWh mainly due to lower average dispatch of power plants; while costprocurements from its power supply agreements (PSAs) also climbed by ₱0.0455 per kWh.

Meralco’s exposure in the spot market last month accounted for 15.9 percent; while supply from IPPs accounted for 33.2 percent; and its PSAs cornered the lion’s share in the pie at 50.9 percent.