Lower generation fee pulls down Meralco’s April rate


Electricity rates within the franchise area of the Manila Electric Co. (Meralco) will slightly go down this month to P11.3168 per kilowatt hour (kWh) from the previous month’s P11.4348 per kWh.

The P0.1180 per kWh reduction in the electricity rate this April will result in a decrease of around P24 in the total electricity bill of residential customers consuming 200 kWh.

In a briefing, Meralco said a lower generation charge pulled down overall rates.  The generation charge went down to P7.3295 per kWh this month from P7.3790 per kWh, even with the collection of the first installment of deferred generation costs equivalent to around P0.20 per kWh this April billing period.

The P0.20 per kWh deferred collection is part of the P1.1-billion total generation cost in March that Meralco opted to stagger to cushion the impact of the rate increase to its customers.

Meralso said the effect of the collection of the first installment was more than offset by lower costs from the Wholesale Electricity Spot Market (WESM) and Meralco’s Power Supply Agreements (PSAs) for the April billing period.

WESM charges were lower by P1.0462 per kWh due to improved supply situation in the Luzon grid, as average plant capacity on outage decreased to around 235 megawatts (MW). Meralco sourced 32 percent of its total requirement from the market compared to 22 percent the previous month.

Charges from PSAs likewise went down by P0.0741 per kWh. Peso appreciation, which affected 43 percent of PSA costs that were dollar-denominated, pulled down the PSA rate.

Also contributing to the reduction were higher share of excess energy deliveries of some PSAs, which are priced at a discount, and higher average plant dispatch, as First NatGas-San Gabriel returned to normal operations. PSAs accounted for 41 percent of Meralco’s energy requirement for the period.

Charges from Independent Power Producers (IPPs) rose by P0.6710 per kWh following the collection of the first installment of deferred generation costs.

Dispatch of the First Gas plants also declined as they underwent scheduled maintenance to ensure their availability during the dry season. In particular, Sta. Rita Modules 10 and 20 were on scheduled maintenance shutdown from March 17 to 25, while San Lorenzo Module 50 and San Lorenzo Module 60 were on maintenance shutdown from February 26 to March 16 and February 26 to March 17, respectively.

The increase in the IPP rate was mitigated by the significant reduction in the use of more expensive alternative fuel by the First Gas plants and the stronger peso, which affected 97 percent of IPP costs. IPPs covered 27 percent of Meralco’s total energy requirement.

All other charges, including transmission charge, taxes and subsidies, registered a net reduction of P0.0685 per kWh.

Collection of the Feed-In Tariff Allowance (FIT-All) remains suspended until the August billing month following the issuance of the Energy Regulatory Commission resolution extending the deferral for another six months starting March. Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and FIT-All are all remitted to the government.

Meralco’s distribution charge, meanwhile, has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.

The company reminded customers that it is still implementing one distribution-related refund, equivalent to P0.8656 per kWh for residential customers, which continues to temper their monthly bills.

However, the final refund is set to be completed by May 2023. This means that rates are likely to go up in the succeeding month.

Meralco also said it has turned over to the ERC an official list of beneficiaries of the lifeline discount.

This is in accordance with Republic Act 11552, also known as “An Act Extending and Enhancing the Implementation of the Lifeline Rate, Amending for the Purpose Section 73 of Republic Act 9136 [Electric Power Industry Reform Act of 2021].”

Under the amended law, beneficiaries of the lifeline discount should come from marginalized households, which are defined as those who are: beneficiaries of the Pantawid ng Pamilyang Pilipino Program or households who secured certification from the local Social Welfare Development Office.

Such households will be entitled to the lifeline discount if their consumption meets with lifeline consumption threshold set by the ERC.  For the Meralco service area, this threshold is at 100 kWh.

Image credits: Roy Domingo