Power rates in Metro Manila will drop further to the lowest since 2017 this month, with typical households likely to see a P6-cut in their bills, according to Manila Electric Co. (Meralco).
The utility on Friday announced a P0.0286 a kilowatt-hour (kWh) decrease in electricity charges to P8.6966/kWh from P8.7252/kWh in June.
The rate cut comes from relaxed supply contracts that brought down generation charges this month, the company said.
Households consuming 300 kWh, 400 kWh, and 500 kWh could expect a decrease in their power bills by P8.58, P11.44, and P14.3, respectively.
The generation component, which accounts for a chunk of the utility’s monthly charge, has fallen for four straight months by P0.0069/kWh to P4.3344/kWh, as Meralco invoked another force majeure provision in its power supply agreements with generators.
The power distributor avoided P265 million worth of generation charges this month after the Energy Regulatory Commission (ERC) cut fixed costs from baseload supply contracts and suspended Meralco’s mid-merit supply contracts
Low electricity demand — peak demand was just 7,051 megawatts in June — allowed the listed utility to invoke the provision.
Total savings from relaxed contracts since April have reached P1.85 billion.
Charges from the wholesale electricity spot market, which provides 15.9% of Meralco’s supply needs, fell by P1.7803/kWh due to a cut in the line rental cost on the its contracts.
Generation cost from independent power producers (IPPs) supplying 33.2% of the distributor’s power needs rose by P0.4354/kWh.
Its purchases from power supply agreements, which deliver half of Meralco’s supply needs, also went up by P0.0455/kWh, resulting from the lower force majeure claim this July.
Transmission charges, which are remitted to the National Grid Corp. of the Philippines (NGCP), fell by P0.0426/kWh due to lower ancillary service charges.
The decrease offset the higher tax and other charges component at P0.0209/kWh, which normalized after the utility completed its ERC-granted adjustment of the system loss charge last month.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Adam J. Ang