FIRING LINE: Lower power rates

By Robert B. Roque, Jr.

If there is one good thing the pandemic brought to Filipinos, believe it or not, it helped lower current electricity rates.

You see, the most significant component of a consumer’s monthly electricity bill comes from generation charges. Meralco was quick to the draw to invoke force majeure claims on its power suppliers during the lockdown.

Almost all businesses closed shop, and the electricity demand fell from mid-March. Consequently, according to the distribution utility’s mid-year presser, it avoided paying full fixed charges for capacity from generators, saving consumers more than P1.8 billion because of the “Act of God” claims.

The end-result: lowered generation cost.

The Energy Regulation Commission (ERC) should prod other distribution facilities servicing areas around the country to replicate this force majeure claims. This will ease the burden of the ordinary consumer.

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Of course, there were other factors to consider for Meralco’s lower power cost. Its generation charges decreased by a whopping 17 percent due to the implementation of new Power Supply Agreements (PSAs) and lower wholesale electricity spot market (WESM) prices.

And sometimes, it truly is the little things that matter. In the same press briefing, Meralco said on the operational end of the spectrum, its system loss performance improved by 0.19 percent points against last year and is 1.34 percent points lower than the government’s cap of 7.25 percent.

Efforts like these to bring down system loss would mean that lower system loss charges would be passed on to consumers. Halfway into the year, there was a 21 percent decrease in system loss charges due to lower generation and transmission charges and reduced system losses.

It explained that franchise customers are now paying an average of P1.06 per kilowatt-hour (kwh) rate less than what they used to pay in the first half of the previous year.

For a better perspective, Meralco’s average retail rate was at a low of P8.19 pesos per kwh in the first six months of 2020 compared with the same period last year of P9.25 per kwh.

This corner is confident that Meralco Chair Manuel V. Pangilinan will keep his word when he said: “Even while everyone faces (the) uncertainty of an unknown future, the entire Meralco organization is committed to and will remain relentless in ensuring network reliability, customer care, and workplace integrity,” he added.

May this little piece of good news provide even a small relief to Firing Line readers.

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