File photo/THEPHILBIZNEWS
The Manila Electric Company (Meralco) announced today another reduction in electricity bills as the overall rate went down by P0.1185 to P9.5842 per kWh, from last month’s P9.7027 per kWh. This is equivalent to a decrease of around P24 in the total bill of residential customers consuming 200 kWh, for a cumulative bill reduction of P39 since the start of the year.
Lower generation charge pulled down overall rates
The generation charge for February decreased by P0.2305 per kWh to P5.1957 per kWh from P5.4262 last month, due to lower charges from Independent Power Producers (IPPs) and the Wholesale Electricity Spot Market (WESM), which more than offset an increase in the rate from Power Supply Agreements (PSAs).
Charges from the IPPs went down by P0.3395 per kWh due to higher plant dispatch of Quezon Power and First Gas – Sta. Rita. Quezon Power resumed normal operations in the January supply month after experiencing some outages and deration in December, while First Gas – Sta. Rita’s output increased following the completion of the scheduled maintenance outage of Module 10 in December.
The IPP charges also reflected a reimbursement from SPEX to First Gas covering a portion of incremental fuel cost incurred in relation to the use of liquid fuel during unplanned Malampaya gas supply restrictions.
These were able to more than offset the increase in Malampaya natural gas prices resulting from its quarterly repricing, and an increase in coal prices.
WESM charges this month decreased by P13.1277 per kWh due to the significant reduction in Meralco’s WESM purchases, which mitigated the impact of higher spot market prices during the January supply month.
Despite lower demand because of cooler weather, the Luzon grid was placed on Yellow Alert on January 10 and 11 due to forced plant outages. The tight supply condition led to sustained high WESM prices, which triggered the imposition of the secondary price cap 28.37% of the time.
The PSA rate, meanwhile, increased by P0.1631 per kWh, owing to lower demand that led to lower excess energy deliveries, which are priced at a discount, from AC Energy, San Miguel Energy Corp. (Sual), and South Premiere Power Corp. (Ilijan). The lower average PSA dispatch, with San Buenaventura on scheduled maintenance until January 19, also contributed to the rate increase.
IPPs, PSAs, and WESM provided 52.2%, 47.4%, and 0.4% of Meralco’s energy requirement, respectively.
Movements in other charges
Transmission charge for residential customers, on the other hand, increased by P0.0454 per kWh due to higher Ancillary Service and Power Delivery Service charges.
Taxes and other charges also registered a net increase of P0.0666 per kWh mainly resulting from the resumption of local franchise tax (LFT) recovery, in accordance with Energy Regulatory Commission (ERC) rules, and higher effective value-added tax (VAT) rates this month.
Collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended as directed by the Energy Regulatory Commission (ERC).
Meralco’s distribution, supply, and metering charges have remained unchanged for 79 months, after registering a reduction back in July 2015.
Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges, as payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the Universal Charges and the Feed-in Tariff Allowance are remitted to the government.
Distribution true-up refund
Meralco’s continued implementation of the Distribution Rate True-Up refund which began in March 2021 continued to temper upward movements of rates. The refund rate for residential customers is at P0.2761 per kWh and appears in customer bills as a line item called “Dist True-Up”.
It can be recalled that the ERC provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. This amount represented the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020.