Meralco rate to drop in July amid demand reduction
CHEAPER ELECTRICITY | Meralco has announced a rate reduction for this month due to low demand and a drop in charges from power suppliers. (Photo by RICHARD A. REYES / Philippine Daily Inquirer)
MANILA, Philippines — Customers of Manila Electric Co. (Meralco) are in for some relief this month as the utility will charge P0.7213 per kilowatt-hour (kWh) less due to lower demand amid the rainy season as well as lower generation charges.
The electricity rate of a typical household will be reduced to P11.1899 per kWh from P11.9112 per kWh in June, which means that residential customers consuming 200 kWh a month can expect a drop of around P144 in their total bill, according to Meralco.
This month’s rate decline ends a two-month streak of rate hikes caused by high demand in the dry season and the expiration of a series of distribution-related refunds.
Generation charge, or the cost of power purchased from suppliers that accounts for more than half of a customer’s total monthly bill, dropped by P0.6436 per kWh, bringing the total charge to P6.6066 per kWh this month from P7.2502 per kWh in June.
According to Meralco, this was on the back of lower spot market prices, which went down by P2.6597 per kWh thanks to declining demand amid the onset of the rainy season.
Sufficient
Despite the threat of the El Niño phenomenon that could hamper power generation, Meralco spokesperson Joe Zaldarriaga said supply remained “sufficient.”
“We also need to see what the impact of El Niño will be compared to the summer months. We don’t know that yet,” Zaldarriaga said, noting that the company was hopeful that power prices in the spot market “will continue to be moderated.”
“We’re still hoping for the best, and it’s difficult to predict because there are a lot of factors in play. These are the things that you have to consider, including temperature levels. The question is will it be at the same height as the summer months?” he said.
Charges from power supply agreements and independent power producers also went down by P0.3915 per kWh and P0.4658 per kWh, respectively, due to lower coal prices.
Demand
Transmission charges, including taxes and subsidies, had a net reduction of P0.0777 per kWh, Meralco said.
Asked whether consumers could expect the same downtrend in the coming months, Meralco head of utility economics Larry Hernandez reiterated that this would depend on demand due to El Niño, which is marked by a longer and possibly more severe dry spell.
According to Hernandez, peak demand in the Luzon grid last week surpassed recorded numbers in the summer season, which was at 12,431 megawatts.
He did not elaborate on the recorded peak demand last week when households experienced high temperatures due to El Niño.
Last month, Meralco increased its electricity rate by P0.4183 per kWh after a distribution-related refund ended.
The refund, amounting to P0.8656 per kWh or P173.12 for a household consuming 200 kWh a month, had tempered electricity rate hikes earlier this year.
As of now, Hernandez explained that the company did not see any major factors that could push generation charges up, depending on fuel prices and foreign exchange rates.
“Global crude oil prices have been trending downward so this will pull down Malampaya rates,” he said.
Meralco currently sources 40 percent of its supply from power plants that use output coming from the depleting Malampaya gas field off northwest Palawan.
Due to uncertainties over how El Niño would impact the power sector, Meralco advised consumers in the meantime to also brace for floods that could be triggered by heavy rains.
“All electrical wires, connectors, and other wiring devices should be kept completely dry, and if outlets or appliances are drenched, it’s best to have a licensed electrician check these before using,” it said.
The company likewise encouraged its eligible customers to apply for its Lifeline Rate Program, which offers subsidies to low-income electricity consumers who may not be able to afford to pay their bills at full cost.
According to Meralco, beneficiaries of the Pantawid Pamilyang Pilipino Program (the government’s cash subsidy program for the poor) with certifications from their local social welfare and development offices are qualified to apply.
However, customers living in condominiums and subdivisions, as well as those with net-metering services and those who violated the Anti-Pilferage Act are no longer qualified for the Lifeline Rate Program.
As of April, Meralco said it had extended rate discounts to more than 2.6 million lifeline customers.
