Despite a small increase in the generation charge, Manila Electric Co. (Meralco) is cutting its power rates by around 5 centavos per kilowatthour (kWh) in May due to downward adjustments in some of the components in its electricity bill.
For a typical household consuming 200 kWh a month, the rate cut will mean almost a P10-reduction in the monthly bill.
Meralco said lower transmission and system loss charges more than offset the P0.07 per kWh increase in the generation charge, or the cost of power sold by producers to distribution utilities like Meralco.
According to Meralco, the generation charge went up by only seven centavos—from P5.90 to P5.97 per kWh this month—despite a P6.70 per kWh increase in charges from the Wholesale Electricity Spot Market (WESM), inclusive of line rentals.
Alfredo S. Panlilio, Meralco senior vice president for customer retail services and corporate communications, cited Meralco’s reduced exposure to WESM as one factor why the generation charge increased only slightly.
“Our preparations to meet increasing demand this summer has allowed us to reduce the share of Wholesale Electricity Spot Market purchases from 3.9 percent in the March supply month down to 3.4 percent in April,” said Panlilio.
He added that deliveries from Toledo Power and Panay Power, with which Meralco recently signed Interim Power Supply Agreements (IPSAs), are likewise helping reduce requirements from WESM.
The cost of power from the Independent Power Producers (IPPs) also went down by P0.13 per kWh, which offset a P0.07 per kWh increase in the average rate of energy from Power Supply Agreements (PSAs).
While electricity rates are down this May, Meralco still cautioned customers to continue to observe energy efficient practices to help manage their consumption and electricity-related expenses, especially this summer.