Meralco cuts rates in June

MANILA, Philippines – For the second straight month, the Manila Electric Company (Meralco) has announced a decrease in electricity rates.

In a release on Wednesday, June 11, the electricity concessionaire announced a power rate reduction of P0.1076 per kilowatt-hour (kWh), bringing the rate down to P12.1552 from May's P12.2628 per kWh.

This translates to a P22 decrease in the total electricity bill for a typical household consuming 200 kWh for the month of June.

According to Meralco, the rate reduction was driven by a decrease in the generation charge, which fell by P0.1099 per kWh to P7.3552 per kWh.

It added that this decline is attributed to lower charges from Power Supply Agreements (PSAs), Independent Power Producers (IPPs) and the Wholesale Electricity Spot Market (WESM).

Charges from PSAs and IPP dropped by P0.3699 and P0.1034 per kWh, respectively, due to lower fuel costs and improved average dispatch.

WESM charges also fell by P0.6342 per kWh, a result of an enhanced supply situation in the Luzon grid during the May supply period. A 533 MW reduction in average capacity on outage also contributed to the decline, effectively offsetting a 527 MW rise in average demand.

For the period, PSAs, IPPs and the WESM accounted for 48%, 33%, and 18% of Meralco’s total energy requirements, respectively.

Meanwhile, while the generation charge decreased, the transmission charge saw a slight increase of P0.0214 per kWh due to higher ancillary service charges from the National Grid Corporation of the Philippines’ (NGCP) Ancillary Service Procurement Agreements and the Reserve Market. 

However, this was more than offset by the reduction in the generation charge. Other charges, including taxes, also registered a net decrease of P0.0191 per kWh.

Meralco emphasized that pass-through charges for generation and transmission are paid to power suppliers and the grid operator, while taxes, universal charges, and Feed-in Tariff Allowance are remitted to the government. 

“Customers also continue to benefit from the ongoing implementation of the distribution-related true-up adjustment, equivalent to a reduction of P0.2024 per kWh for residential customers,” the concessionaire said.