Meralco to cut rates this month

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POWER rates will drop this month by as much as 19 centavos per kilowatt-hour (kWh), the Manila Electric Co. (Meralco) said on Wednesday.

The adjustment is equivalent to a decline of about P38 in the electricity bill of a household consuming 200 kWh.

Meralco attributed the rate reduction, the third since November, to lower generation charges due to cheaper coal and as the supply situation normalized.

Since November, power rates have gone down by 79 centavos per kilowatt-hour.


According to Meralco, generation charge, or the portion of the bill that goes to generation companies or power producers, has fallen by a further 22 centavos, from P4.94 in December to P4.72 in January.

This is the lowest generation charge in 15 months. The reduction was primarily caused by lower charges from power plants under Power Supply Agreements (PSAs), which registered a cut of 73 centavos per kWh during the December supply month.

The coal prices of some suppliers went down by almost $2 per metric ton.

The lower PSA charges more than offset higher charges from Independent Power Producers (IPPs) and the Wholesale Electricity Spot Market (WESM), which increased by 24 centavos and P1.68 per kWh, respectively.

Meralco, however, said generation charges may shoot up when the weather gets warmer and when the Malampaya gas facility goes off the grid from March to April this year.

Contributing also to the overall downward adjustment in electricity bills is the 26- centavo decrease in taxes and 11-centavo cumulative decrease in the system loss charge and subsidies.

Transmission charges, on the other hand, increased by P0.062 per kWh.

Payment for the generation charge goes to power suppliers such as the plants selling to Meralco through the WESM and under the PSAs, as well as the IPPs.

Payment for the transmission charge, meanwhile, goes to the National Grid Corporation of the Philippines.

Of the total bill, only the distribution, supply and metering charges accrue to Meralco.

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  1. MERALCO board of directors may want to talk to MERALCO management. Conforming to economics of supply-demand/pricing is foolhardy given the prospect of Senate-action and even Supreme Court TRO when prices gets raised. Lowering rates now when MERALCO knows that in 6 or 9 months, they will have to raise again management — maybe in Indonesia or Singapore, yes…. in Pilipinas??? NO.