Meralco slashes power rate in April

Customers of the Manila Electric Company (Meralco) can expect a sigh of relief this month as the power distributor slashed its overall household electricity rate for April.

In an advisory, Meralco said it slashed its electricity rate by P0.1180 per kilowatt-hour (kWh) in April.

This brought the overall rate for a typical household to P11.3168 per kWh from P11.4348 per kWh in March.

The rate reduction translates to a decrease of around P24 in the total bill of a residential customer consuming 200 kWh.

Meralco attributed the lowering of the power rate in April to lower generation charge which went down to P7.3295 per kWh this month from P7.3790 per kWh in March.

The power distributor said the generation charge declined “even with the collection of the first installment of deferred generation costs equivalent to around P0.20 per kWh this April billing period.”

To recall, in March, Meralco coordinated with its suppliers and the Energy Regulatory Commission (ERC) to stagger the collection of a total of around P1.1 billion in March generation costs to cushion the impact of the rate increase to its customers.

“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,” the company said.

Meralco said WESM charges were lower by P1.0462 per kWh due to an improved supply situation in the Luzon grid, as average plant capacity on outage decreased to around 235 MW.

The power distributor said it sourced 32% of its total requirement from the WESM compared to 22% the previous month.

Charges from PSAs likewise went down by P0.0741 per kWh on the back of the peso’s appreciation, which affected 43% of PSA costs that were dollar-denominated.

“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 following its planned outage during the 15-day shutdown of the Malampaya facility last February,” Meralco said.

PSAs accounted for 41% of the company’s energy requirement for the period.

On the other hand, charges from Independent Power Producers (IPPs) increased by P0.6710 per kWh following the collection of the first installment of deferred generation costs.

Meralco said dispatch of the First Gas plants also went down as they underwent scheduled maintenance to ensure their availability during the dry season.

In particular, it said that 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 against the US dollar, which affected 97% of IPP costs.

IPPs covered 27% of Meralco’s total energy requirement.

On the other hand, all other charges, including transmission charge, taxes and subsidies, also registered a net reduction of P0.0685 per kWh.

Meralco said the collection of the Feed-In Tariff Allowance (FIT-All) remains suspended until the August billing month following the issuance of the ERC Resolution extending the deferral for another six months starting last month.

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, the company said.

Meralco said its distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.

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

The final refund is set to be completed by May 2023, impact of which will be felt the succeeding month. —VAL, GMA Integrated News