Meralco rates cut by P1.10 per kwh

MANILA, Philippines - The Manila Electric Co. (Meralco) will collect P1.10 per kilowatt-hour less from its clients this month to reflect lower generation charges.

Meralco said electricity bills this month would reflect a generation charge of P4.31 per kilowatthour from last month’s P5.41 per kwh.

Last month, Meralco reduced its rates by 68 centavos per kwh also on lower generation charges. 

This month’s generation charge is the lowest since February this year when the figure was P4.93 per kwh. 

Meralco had been expecting lower generation charge on account of lower charges from independent power producers (IPPs).

The lower rates of Napocor and the IPPs have more than offset the P1.20 increase in the effective cost of power from the Wholesale Electricity Spot Market (WESM).

Meralco noted that the drop in rates was made possible by the higher dispatch of its IPPs.

“There were extraordinary developments last month that resulted in the very low generation charge this month. In addition to the adjustment in Napocor billing, the dispatch of the IPPs was at a record high of 93.9 percent, an improvement of 2.8 percent from the 91.1 percent registered in August,” Meralco said.

The power utility company said the appreciation of the peso also contributed to the lowering of the cost of power from the IPPs.

However, Meralco said “it is unlikely that these same developments will be replicated in the succeeding months.”

Meralco also reiterated that the generation charge is entirely a “pass through” charge and not a source of income. The cost of power sold by the generating companies can change from month to month based on several factors beyond their control like fuel prices, foreign exchange rate, and WESM prices, among others.

The generation charge, which is the electric bill’s biggest component, comprises about 60 percent of the customer’s average monthly power bill.