Power rates cut in August


Customers of Manila Electric Company (Meralco) will see an overall reduction in their power bills in August.

The electricity bill of a household using 200 kWh will go down by P70 this month.

In a statement, Meralco said it will reduce power rates by 35-centavos per kilowatt hour (kWh) because the generation charge and other charges went down in the electricity market.

The generation charge dropped by 28 centavos per kWh from P5.33 per kWh to P5.05 per kWh, its lowest level since May 2011.

This was brought about by the significant P5.27 per kWh reduction in the cost of power bought from the Wholesale Electricity Spot Market (WESM). Spot market prices dropped as demand for power eased and the onset of the rainy season led to a higher power output from hydroelectric plants.

The average cost of power sourced from the Independent Power Producers (IPPs) likewise decreased by 5 centavos per kWh from P5.34 to P5.29 per kWh which was mainly due to lower coal and natural gas prices.

Also, while the generation cost of the Power Supply Agreements (PSAs) had a slight upward adjustment of 5 centavos per kWh, it still remained the lowest cost of supply among the power suppliers. PSA rates moved from P4.19 to P4.24 per kWh.

Meralco said transmission charge had a very slight decrease of 0.5 centavo per kWh, while taxes, which consist of the value added tax (VAT) and local franchise tax (LFT), decreased by 4 centavos per kWh.

Other bill components, which include the system loss charge, power act reduction, subsidy, and universal charges, had a total reduction of 3 centavos per kWh.


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