ELECTRICITY rates for this month will go down by P0.3598 per kilowatt hour (kWh) to P8.3195 per kWh, the lowest since August 2017.
The Manila Electric Company (Meralco) said on Tuesday the downward adjustment is equivalent to a decrease of around P72 in the total bill of residential customers consuming 200 kWh. Last month’s power rates stood at P8.6793 per kWh.
The rate reduction was brought about by a refund order of the Energy Regulatory Commission (ERC), which 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 represents 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.
For residential customers, the refund rate is P0.2761 per kWh and will appear in customer bills as a line item called “Dist True-Up”.
This month’s rate also still includes the ERC-approved adjustments for pass-through over/under-recoveries for the period January 2017 to December 2019. The ERC ordered Meralco last December 29, 2020, to refund over-recoveries in transmission and other charges over a period of approximately three months and to collect an under-recovery in the generation rate for approximately 24 months.
Meralco implemented the ERC-approved adjustments starting January 2021. The impact on residential customers, from the months of January to March 2021, is a net refund of around P0.1150 per kWh.
The March power rate also reflects a lower generation charge of P4.3749 per kWh, P0.0403 lower than February’s P4.4152 per kWh.
The reduction was due to the higher share of supply from the Wholesale Electricity Spot Market (WESM), which registered the lowest charge among suppliers.
Despite an increase in Luzon peak demand from 9,162 MW to 9,574 MW, charges from the WESM remained relatively stable at P2.4609 per kWh. WESM share was up from 7.1 percent last month to 11.7 percent this month.
The low WESM charges offset increases in costs from Power Supply Agreements (PSA) and Independent Power Producers (IPPs) of P0.0175 per kWh and P0.1338 per kWh, respectively. The higher PSA and IPP charges were the result of the peso’s depreciation and lower average plant dispatch. The shares of PSAs and IPPs went down this month to 52.5 percent and 35.8 percent, respectively, from 53.4 percent and 39.5 percent, respectively, last month.
Meanwhile, transmission charges for residential customers inched up by P0.0022 per kWh, while taxes and other charges registered a net decrease of P0.0456 per kWh.
The collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.
Unchanged
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 68 months, after these registered reductions in July 2015.
The utility firm does not earn from the pass-through charges, such as the generation and transmission charges. 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 FIT-All are remitted to the government.
Meralco reminded its seven million customers to continue practicing energy efficiency initiatives at home and to be ready in managing their consumption.
The summer season normally results in an increase in residential electricity consumption by 10 percent to 40 percent versus average consumption during the cool months of January and February. As temperature increases, appliances that have compressors, like air conditioners or refrigerators, will have to work harder. Electric fans are also used longer than usual, and often at “high” setting to beat the summer heat.
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