Meralco says electricity rate is lower this June

The Manila Electric Co. (Meralco) said Thursday the overall electricity rate for June 2018 is going down by P0.1252 per kWh for a typical household.

The lower June rate is mainly the result of a P0.1556 per kWh decrease in generation and transmission charges, which more than offset a P0.0733 per kWh increase in the Feed-In Tariff Allowance or FIT-All.

This is the second consecutive month of overall rate decrease, according to Meralco.

“The adjustment this month brings down the overall rate to P9.8789 per kWh from May’s P10.0041 per kWh, equivalent to a decrease of around P25 in the bill of a residential customer consuming 200k Wh.”

Lower charges

From P5.0523 per kWh in May, the generation charge this June will go down to P4.9828 per kWh.

The reduction is the result of a P0.4420 per kWh decrease in the cost of power from Power Supply Agreements (PSAs), mainly due to higher dispatch of Pagbilao Unit 1 and Ilijan Unit 1.

Both power plants returned to normal operations after undergoing scheduled maintenance.  The share of PSA purchases to Meralco’s total requirement this month was 45 percent.

Charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs) increased by P0.1954 per kWh and P0.2266 per kWh, respectively.

As demand for power in the Luzon grid grew by about 239 MW, charges from WESM increased due to higher effective rates of line rentals.

Higher IPP charges, on the other hand, were driven by a weakening of the peso against the US dollar.

Around 96 percent of IPP charges are dollar-denominated. The shares of WESM and IPP purchases to Meralco’s total requirement this month was 15 percent and 40 percent, respectively.

Other charges

The transmission charge to residential customers decreased by P0.0861 per kWh due to lower NGCP Power Delivery and Ancillary Service Charges. With the lower generation and transmission charges, taxes and other charges also went down by P0.0429 per kWh this month.

However, starting this month, the FIT-All rate will go up at P0.2563 per kWh, after the Energy Regulatory Commission approved an increase of P0.0733 per kWh from the previous rate, Meralco noted.

FIT-All is a pass-through charge remitted to the National Transmission Corporation (TransCo) as incentive to renewable energy (RE) developers—those operating wind, solar, biomass, and run-of-river hydropower facilities.

Meralco said its distribution, supply, and metering charges have remained unchanged for 35 months after registering reductions in July 2015.

The company reiterated it does not earn from the pass-through charges, such as the generation and transmission charges, saying generation charge goes to power suppliers while the transmission charge goes to NGCP.

Taxes and other public policy charges like the FIT-All rate are remitted to the government.

Energy-saving tips

As summer is over, Meralco said customers must continue practicing energy efficiency initiatives to help manage their consumption:

• unplug appliances when not in use to avoid “phantom load”

• use the air conditioner at mid-setting or 25 degrees Celsius for maximum efficiency

• use a power board or strip which can supply power to several appliances at once

• maximize natural light during daytime and keep appliances well maintained to ensure optimal performance

A power board allows a user to conveniently turn off appliances simultaneously with a single switch. —VDS, GMA News