Electricity bills down this month

MANILA, Philippines - Electricity bills of customers of the Manila Electric Co. (Meralco) will be reduced by 27 centavos per kilowatt-hour (kwh) this month.

In a statement, Meralco said its generation charges for the billing month of December would be P5.51 per kwh compared to November’s P5.79 per kwh.

Meralco said the generation charge declined because of a reduction in the price of power purchased from the Wholesale Electricity Spot Market.

WESM prices decreased by P3.49 per kwh from a high of P12.48 last October to P9.00 per kwh.

WESM prices had increased in October due to a generation supply constraint brought about by the maintenance shutdown of the Malampaya natural gas pipeline from Oct. 20 to 26.

With the pipeline resuming normal operations in November, power plants dependent on Malampaya for fuel were able to produce more power.

This helped ease the supply constraint and bring down WESM prices.

The WESM was the source of 8.9 percent of Meralco’s energy requirements in November.

The reduction in WESM prices offset slightly the higher prices from the independent power producers (IPPs), whose prices went up by an average of 38 centavos per kwh. 

The First Gas plants (Sta. Rita and San Lorenzo), which started utilizing banked gas in October, already had to run on regularly priced Malampaya gas for the remainder of November. 

The IPP prices were also affected by the peso’s depreciation against the US dollar.

Meralco sourced 48 percent its power requirements in November from the IPPs and the remaining 43.1 percent from the National Power Corp. (Napocor).

Meralco reiterated that the cost of power sold by the generating companies could move from month to month based on many factors beyond its control like fuel prices, the foreign exchange rate, and WESM prices, among others.

Meralco added that should there be adjustments in the cost of generation from its various suppliers, it would reflect these changes in the customers’ bills, such as this month’s reduction.

The generation charge, which is the electricity bill’s biggest component, averages almost 60 percent of the customer’s average monthly power bill. This charge goes directly to Meralco’s power suppliers and not to Meralco.

Meralco serves over four million customers in its Metro Manila, Laguna, Batangas and Bulacan franchise areas.