Electricity rates down this month

Customers of Manila Electric Co. (Meralco) will see a reduction in their November electricity bills – the fourth consecutive month this year – as lower spot market prices dragged down the overall generation charge for the period.

November electricity rates went down by P0.08 per kilowatt-hour to P8.26 per kWh, the lowest since January 2010, Meralco announced yesterday.

It is also lower by P0.29 per kWh compared to November 2015’s P8.55 per kWh, it said.

“The reduction is mainly due to the downward movement in the generation charge,” the country’s largest power distributor said.

In terms of household consumption, this month’s decrease is equivalent to P15.62 for 200 kWh, P23.44 for 300 kWh, P31.26 per kWh and P39.07 per kWh.

This month’s generation charge, which declined by P0.05 per kWh from last month’s P3.89 per kWh to P3.84 per kWh, was mainly because of the lower charges from the Wholesale Electricity Spot Market (WESM).

Meralco said WESM prices decreased by P0.28 per kWh. The power distributor sourced 20.1 percent of its power requirement from the spot market, higher than the previous month’s 16.1 percent share.

The decline in spot market prices offset the increases in Independent Power Producer (IPP) and Power Supply Agreement ( PSA) costs brought about by higher coal and natural gas prices and low dispatch.

The cost of power sourced from plants under the PSAs increased by P0.02 per kWh primarily due to higher fuel costs.

“Coal prices in the region continued to rise from $67.41 per metric ton in August to $72.7 per MT in September,” Meralco said.

On the other hand, cost of power from the IPPs also increased by P0.05 per kWh, primarily due to the scheduled outage and lower dispatch of San Lorenzo plant, and the higher cost of natural gas following its quarterly repricing.

For the period, Meralco sourced 42.5 percent of its requirements from PSAs and 37.3 percent from IPPs.

Meanwhile, there was also a decrease in other Meralco bill components.

Transmission charge declined by P0.02 per kWh because of the reduction in the ancillary charge differential the National Grid Corp. of the Philippines (NGCP) began to collect from its Luzon customers in June.