RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see lower electricity bills this month due to the decline in generation charges.
In a statement on Monday, Meralco said the overall electricity rate will be reduced by P0.72 per kilowatt-hour (kWh) to P11.18 per kWh in July, from P11.91 per kWh in June.
Households that consume 200 kWh of electricity will see a reduction of about P144 in their monthly power bills.
Meanwhile, households that consume 300 kWh, 400 kWh, and 500 kWh will see a decrease of P216, P289, and P361, respectively, in their bills.
Meralco attributed this month’s lower power rates to the P0.64 per KWh reduction in the generation charge to P6.61 per kWh. The generation charge accounts for more than half of a consumer’s total monthly electricity bill.
Transmission and other charges, which include taxes and subsidies, also saw a net reduction of P0.08 per kWh, Meralco said.
Joe R. Zaldarriaga, Meralco spokesperson and vice-president for corporate communications, said during an online briefing that power supply agreements (PSA) accounted for 48% of its energy requirements for the month.
Charges from PSAs and independent power producers (IPP) fell by P0.39 per kWh and P0.47 per kWh, respectively, mainly due to lower coal prices.
The peso appreciation against the US dollar also helped bring down power rates, as it affected 20% of PSAs and 97% of IPP costs.
The peso closed at P55.20 against the US dollar on June 30, gaining P0.95 from its close of P56.15 on May 31.
Mr. Zaldarriaga said the Wholesale Electricity Spot Market (WESM) charges, which account for 15% of Meralco’s total requirement, declined by P2.66 per kWh to P8.28 per kWh.
EL NIñO IMPACTLawrence S. Fernandez, vice-president and head of utility economics of Meralco, said the El Niño weather phenomenon will not have a significant impact on power rates yet.
“The usual factors that affect power costs mainly affect generation charge, so far, PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration) said that we are still in the weak El Niño although we’ve seen, especially last week, warmer temperatures in Luzon,” he said.
The state weather bureau last week declared the onset of El Niño, which will likely affect power generation due to the expected decline of hydroelectric power plants’ output.
Power demand tends to go up during warmer temperatures causing upward pressure in the electricity spot market, Mr. Fernandez said.
Data provided by the Energy department showed that power demand in Luzon last week was recorded at 12,550 megawatts (MW), the highest so far for the year, surpassing Luzon’s previous high which was recorded at 12,417 MW in May.
“So far, the supply has been sufficient. We have not seen many indications that there are red, yellow alerts forthcoming,” he said.
Given the expected impact of El Niño, Meralco said any competitive selection process (CSP) to be conducted must be in line with the power supply procurement plan which will be approved by the Energy department.
“For the CSP, we are guided by the rules of the Department of Energy (DoE). We submitted our power supply procurement plan to the DoE and are waiting for that approval before we can conduct any new CSP,” Mr. Fernandez said.
LIFELINE RATE DISCOUNTMeanwhile, the power utility giant urged customers to avail themselves of the lifeline rate discount, following the issuance of rules for eligibility of customers under the program.
Last month, the Energy Regulatory Commission (ERC) together with the DoE and Department of Social Welfare and Development issued an advisory mandating all distribution utilities to implement the revised rules on the lifeline rate.
The lifeline rate is a subsidy provided to customers with a monthly power consumption of 100 kWh and below.
“Only those who are really part of the marginalized sectors will be the ones to enjoy this subsidy,” Mr. Zaldarriaga said.
According to the revised rules, customers living in condominiums, subdivisions, those with net-metering services are no longer qualified for the lifeline rate despite having lower consumption.
Meralco customers who are considered qualified under the lifeline rate will be provided a percentage discount which usually ranges from 20% to 100%, depending on their power consumption, Mr. Zaldarriaga said.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT).
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