Meralco power rates at lowest level last year; yields P14B savings to consumers

The Manila Electric Company (Meralco) saw average power retail rate at its lowest level last year, with the drop mainly owed to the significant decrease in generation charges resulting in P14 billion savings to customers.
In 2020, the average retail rate clocked in at P7.96 per kilowatt-hour (kWh), representing a 10-percent decline from the P8.87/kWh registered in 2019, according to Atty. Jose Ronald V. Valles, Meralco First Vice President and Regulatory Management Head in a media briefing Monday last week.
This was owed to the 16.1 percent decrease in generation charges due to the implementation of new power supply agreements (PSA) that provided P8.4 billion savings to consumers and slashed the average system loss charge by 12.6-percent.

Also accounted for the drop were the lower Wholesale Electricity Spot Market (WESM) prices and the peso appreciation, as well as the invocation of Force Majeure claims during the community quarantine that slashed fixed costs and charges from temporary suspension of mid-merit supply contracts. The latter resulted in consumer savings of up to P2.4 billion.
In addition, Meralco provided as much as P3.2 billion payment relief to customers who were unable to meet their guaranteed minimum billing demand.

During the same period, there was a 6.2-percent increase in transmission charges as compared with the year prior due to higher power delivery service and ancillary service charges, as well as lower average system load factor because of the community quarantine.

“We see the lower rates last year as hopeful relief for our consumers, especially during these trying times. We hope that the lower power costs as projected this month will further provide assistance to our customers in so far as their power bills are concerned,” Joe R. Zaldarriaga, Meralco Vice President for Corporate Communications and Spokesperson, said. Last week, Meralco announced a possible reduction in power rate for the month of March still due to lower generation costs and the impact of a P13.9-billion refund order from the ERC. This would mark as the second consecutive month of decrease for the year