Meralco power rate down slightly in May

A typical household consuming 200 kWh will be charged a rate lower by around P0.05 per kilowatt-hour (kWh) this month, equivalent to an almost P10 reduction in their monthly bill.

Lower ancillary service component of the transmission charge, lower systems loss, and fewer customers who availed themselves of the lifeline subsidy were among the reasons cited by the country’s largest distribution utility for the decrease.

“These reductions in the other bill components more than offset a slight adjustment in the generation charge,” Meralco said in an advisory.

Meralco also said the generation charge increased only slightly because the company tempered its exposure to the volatile power spot market.

As a result of the lower share of Wholesale Electricity Spot Market (WESM) purchases, the generation charge inched up by only P0.07 per kWh, from P5.90 to P5.97 per kWh this May, despite a P6.70 per kWh increase in charges from the WESM, inclusive of line rentals.

The cost of power from the so-called “Independent Power Producers” (IPPs) went down by P0.13 per kWh. This offset a P0.07 per kWh increase in the average rate of energy from Power Supply Agreements (PSAs), which still remained the source of power with the lowest cost. PSAs and IPPs accounted for 56.1 percent and 40.4 percent of total energy requirements, respectively.

“Our preparations to meet increasing demand this summer has allowed us to reduce the share of WESM purchases from 3.9 percent in the March supply month down to 3.4 percent in April,” SVP for customer retail services and corporate communications Alfredo S. Panlilio said.

Panlilio said that deliveries from Toledo Power and Panay Power, with whom Meralco recently signed “interim power supply agreements” (IPSAs), started on April 3, helping reduce requirements from WESM. Meralco also fast-tracked a subtransmission line project that allowed Therma Mobile to increase its available capacity from 150 MW to 200 MW beginning April 23, further helping minimize the volume of power needed from the WESM.

The reduced WESM share was also partly due to the earlier-than-scheduled resumption of operations of Ilijan 1, after it went on maintenance outage.

A 200 kWh household will see its transmission charge go down by P0.08 per kWh. Primary reason for this was the lower cost of ancillary charges.

There was also a cumulative reduction of P0.04 per kWh in subsidies and the system loss charge. Lower system loss charge was mainly due to reduced system loss from 6.6 percent last month to 6.5 percent this month.

The distribution charge has not changed since July 2013, Meralco said.

While electricity rates are down this May, Meralco advised customers to continue to observe energy efficient practices to help manage their consumption, and hence their electricity-related expenses.

“Household electricity consumption is usually highest in summer,” Panlilio said.

Some examples of energy efficient practices include keeping the motors of electric fans clean. When using air conditioners, it is also advisable to set the thermostat to a comfortable level instead of the coolest level to save on electricity cost.

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