Filipino consumers will pay less for their electricity this September as the Manila Electric Company (Meralco) announced a rate reduction due to lower generation charge.
The Manuel V. Pangilinan-led distribution utility said rates will go down by ₱0.1852 per kilowatt-hour (kWh), bringing the new rate to ₱13.0851 per kWh from last month’s ₱13.2703 per kWh.
According to Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga, the rate decrease translates to a ₱37 reduction in the electricity bill of a typical household consuming 200 kWh.
For households with higher consumptions of 300 kWh, 400 kWh, and 500 kWh, the rate decrease is equivalent to a reduction of ₱56, ₱74, and ₱93 in their electricity bills respectively.
“We hope that along with relatively lower consumption during this period, this rate cut will bring relief to our customers,” he said.
Lower generation charge drives overall rate reduction
This month’s reduction was mainly driven by a drop in the generation charge, which went down by ₱0.2603 per kWh owing to lower costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).
Charges from IPPs fell by ₱1.3459 per kWh, while PSA charges went down by ₱0.3660 per kWh due to the appreciation of the local currency against the US Dollar and decrease in international fuel prices. The stronger Peso affected around 99% of IPP costs and 57% of PSA costs that were dollar denominated.
These decreases were more than enough to offset the higher Wholesale Electricity Spot Market (WESM) charges and the start of collection of the contract price adjustment of Sual Power, Inc. (SPI) and South Premiere Power Corporation (SPPC).
WESM charges increased by ₱0.3785 per kWh, as average demand in the Luzon grid and average capacity on outage increased by 182 MW and 132 MW, respectively.
Meanwhile, the implementation of SPI and SPPC’s contract price adjustments follows the Supreme Court’s ruling that affirmed the right to invoke the “Change in Circumstance” clause of their supply agreements and allowed the generation companies to collect price adjustments to reflect additional fuel costs. As a result, the Energy Regulatory Commission approved a total amount of ₱5.1 billion, to be collected over a period of six (6) months, starting this September. This is around ₱0.26 per kWh for this month.
PSAs, IPPs, and WESM accounted for 65%, 29%, and 6%, respectively, of Meralco’s total energy requirement for the period.
The transmission charge, another pass-through component of the electricity bill, meanwhile went up by ₱0.1130 mainly due to higher ancillary service charges from the Reserve Market.
Other charges, including taxes, meanwhile registered a net decrease of ₱0.0379 per kWh. Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government.
Meralco reiterates that its distribution charge, on the other hand, has not moved since the ₱0.0360 per kWh reduction for a typical residential customer beginning August 2022. In addition, customers continue to benefit from an ongoing distribution-related true-up adjustment, equivalent to another ₱0.2024 per kWh reduction.
Safety during the rainy season
As the rainy season continues, Meralco is also reminding customers to prioritize electrical safety, especially in flood-prone areas.
“Switch off the main electrical power switch or circuit breaker in case of flooding, keep hands dry when touching electrical appliances, and always have drenched outlets or appliances checked by a licensed electrician before using,” Zaldarriaga advised.
He stressed that simple safety precautions can help prevent accidents and save lives during storms.
Energy Efficiency Tips
Beyond the rate reduction, Meralco continues to encourage consumers to manage their electricity use efficiently. Practical tips include:
Regularly cleaning air conditioner filters and electric fan blades
Ironing clothes in bulk
Avoiding overfilling refrigerators
Using LED bulbs for lighting
Customers can also track their energy consumption through the Meralco Appliance Calculator and access services via Meralco’s digital platforms such as the My Meralco app, official social media channels, and the Meralco hotline 16211.