Lower electricity rates this month

MANILA, Philippines - Manila Electric Co. (Meralco) customers will pay less for electricity this yuletide season, snapping two consecutive months of rate increases, after generation charge decreased last month.

Actual generation charge for November, which will reflect in electricity bills this month, fell by 15 centavos per kilowatt-hour (kwh) to P5.47 per kwh.

Residential customers with a consumption level of 200 kwh a month will see a 31-centavo per kwh decline in their bills as generation, transmission and system loss charges all slipped, Meralco said.

The generation charge, which is the electricity bill’s biggest component, accounts for 56 percent of the customers’ average monthly power bill. This charge goes directly to suppliers of Meralco, the country’s largest power distributor.

“Contributing to the lowering of the generation charge is the cheaper cost of power from the National Power Corp. (Napocor),” Meralco said.

Specifically, Napocor rates declined by 31 centavos per kwh.

“This was caused mainly by lower purchases during peak periods in the November supply month as compared with the previous month,” the power distributor said.

Lower Napocor rates were enough to offset a four-centavo per kwh increase in overall costs from independent power producers (IPPs) due to lower dispatched electricity from First Gas Holdings Corp. and Quezon Power (Philippines) Ltd. Co.

Quezon Power operates a 460-megawatt (MW) coal-fired power plant in Quezon province, while First Gas owns the 1,000-MW Sta. Rita and the 500-MW San Lorenzo natural gas power plants, both in Batangas.

“IPP costs would have been higher without the improved dispatch and lower fuel costs of SEM-Calaca Power Corp.,” Meralco said.

Rates from the Wholesale Electricity Spot Market (WESM) also rose by 52 centavos per kwh.

“However, its impact was mitigated by a reduction in Meralco’s exposure to the spot market, from seven percent to six percent of the total supply requirements,” Meralco said.

Meralco, whose power generation charge gained by 13.5 centavos per kwh in November and by 10 centavos per kwh in October, sourced 51 percent of its electricity requirements from Napocor and 43 percent from IPPs.

Meanwhile, the transmission charge for residential customers fell 11 centavos per kwh due to lower ancillary service charges of transmission service provider National Grid Corp. of the Philippines.

“With lower generation and transmission charges, the system loss charge to residential customers also decreased by four centavos per kwh,” Meralco said.