DESPITE an increase in power distribution charges, the Manila Electric Company (Meralco) on Friday said there will a slight reduction in electric bills this month because of certain adjustments.
In a statement, Meralco said July rates will go down by 30-centavo per kilowatt hour (kWh) because of lower market rates and reduced generation charge.
This means that the electric bill of a typical household using 200 kWh will drop by around P60 this month.
The country’s biggest power distributor said the generation charge went down by 33 centavos per kWh from P5.66 per kWh to P5.33 per kWh, due largely to the 14-centavo per kWh cut in the rates of the new Power Supply Agreements (PSAs) and P6.04 per kWh reduction in the rates of the Wholesale Electricity Spot Market (WESM).
These adjustments offset the 27-centavo and P1.66 per kWh increase in the rates of the Independent Power Producers (IPPs) and the National Power Corporation (NPC), respectively.
Moreover, plants selling to Meralco under the PSAs continued to offer the lowest rates and accounted for 54 percent of Meralco’s total energy requirement in June, while the cost of power purchased from the WESM dropped as supply normalized and demand eased with the onset of the rainy season.
However, consumers would still have to note that although there’s a decrease in their electricity bills this time, the increase in the utility’s distribution tariff approved by the Energy Regulatory Commission (ERC) will be reflected in the consumer bills in the long term basis.
On Thursday, it was reported that Meralco will be charging higher rates starting next month as regulators have finally given their approval to the power distributor’s proposed adjustment in distribution rates.
The ERC issued a decision allowing Meralco to finally implement adjustments in its distribution tariff, setting Meralco’s maximum average price (MAP) for 2014 at P1.6474 per kilowatt-hour up by P0.0171 from P1.6303 per kilowatt-hour.
This approved adjustment, however, is lower than the P1.6510 per kilowatt-hour hike Meralco initially proposed.