Meralco may cut power rates this month
Customers of Manila Electric Co. (Meralco) are likely to see a reduction in power rates this month due to lower generation charge – the biggest component in electricity bills.
“We may see the possibility of lower electricity rates this month following a slight increase in December,” Meralco spokesperson Joe Zaldarriaga said.
He said charges from the Wholesale Electricity Spot Market (WESM) as well as the peso-dollar exchange rate have been stable for the December supply month.
Data from the Bangko Sentral ng Pilipinas (BSP) showed the peso-dollar exchange rate averaged P49.815:$1 in December versus the P49.155:$1 average in November.
Meanwhile, spot market operator Philippine Electricity Market Corp. (PEMC) earlier said it expects WESM prices to continue its downtrend in December until February this year because of ample power supply and lower demand due to cooler temperature.
Apart from WESM prices and the foreign exchange factor, the cost of power sold under power supply agreements (PSAs) are also seen to register a decline, Zaldarriaga said.
“While spot market costs and dollar to peso exchange
rate were stable, we may see a decline in rates from our power supply agreements or PSAs as a result of annual reconciliation of outage allowances as provided for in the contracts approved by the regulators,” he said.
Under the PSAs, the Energy Regulatory Commission ( ERC) has approved an annual outage allowance – forced or unforced – for each plant.
After accounting for the unutilized outage allowance of the power plants for the full calendar year, the capacity charges normalize in January of the succeeding year.
In December, electricity rates went up by 10-centavo per kilowatt-hour (kWh) mainly driven by higher generation charge due to peso depreciation affecting costs.
Meralco said the increase in rate is equivalent to an overall rate of P8.36 per kWh, which is still lower than the 2015’s P8.61 per kWh rate.