Meralco cuts electricity rates for 4th straight month

EMPOWERED Meralco employees fix power lines in Makati City.

MANILA, Philippines — Customers of Manila Electric Co. will enjoy a 20.55-centavo per kilowatt-hour (kWh) reduction in their August electricity bills, thanks to low natural gas prices, a stronger peso and the improved supply-demand situation in the Luzon grid.

It was the fourth straight month of reduction implemented by Meralco.

For a typical residential customer that consumes 200 kWh a month, the latest rate reduction means a decrease in the electricity bill by P41.

Meralco said that for the August billing period, its overall charge went down to P8.4911 per kWh from P8.6966 per kWh in the July billing period.

Meralco spokesperson Joe Zaldarriaga told a press briefing that Meralco’s overall rate had decreased by a net of P1.37 per kWh from January to August.

The generation charge alone went down slightly by 21.03 centavos per kWh to P4.1241 per kWh from P4.3344 per kWh previously.

Zaldarriaga said this was partly due to lower prices at the Wholesale Electricity Spot Market that went down by P1.12 per kWh. This was, in turn, attributed to an improved supply situation as there were less power plant outage.

Also, the cost of supply from independent power producers (IPPs) decreased by 32.84 centavos per kWh because the quarterly pricing of Malampaya natural gas went down along with the slump in crude oil prices.

“The significant reduction in crude oil prices in the first half of the year was reflected in this month’s Malampaya natural gas price, which is tied to the price of crude oil,” Zaldarriaga.

He added that the peso’s appreciation against the US dollar also contributed to this month’s reduction in IPP rates. About 97 percent of cost from IPPs are dollar-denominated.

Further, Zaldarriaga said Meralco continued to invoke the force majeure provision of its power supply agreement with the First Gen group, although claims were lower for this month.