Meralco cuts September power rate by P0.0409 per kWh
Key Takeaways
- •Meralco's overall electricity rate fell by P0.0409 per kWh to P14.7424 in September, down from P14.7833 in August, marking a second consecutive monthly decrease.
- •Lower ancillary service charges, down P0.3344 per kWh due to reduced reserve market costs collected by NGCP, and a P0.1657-per-kWh net decrease in taxes were the main drivers of the rate cut.
- •The generation charge rose P0.4232 per kWh, driven by a weaker peso, which closed at P62.265 against the dollar on Aug. 28, and increased fuel costs following the escalation of the Middle East conflict.
- •Households consuming 200 kWh will pay P8 less monthly, while customers using 300 kWh, 400 kWh, and 500 kWh will see reductions of P12, P16, and P20, respectively.
- •Lower WESM charges from weaker Luzon grid demand and two refunds totaling P1.0139 per kWh partially tempered the generation charge increase, while the distribution charge has remained unchanged since August 2022.
More than eight million customers of Manila Electric Co. (Meralco) will receive slightly lower electricity bills in September after reduced ancillary service charges and taxes offset higher generation costs.
In a statement on Friday, Meralco said its overall rate fell by P0.0409 per kilowatt-hour (kWh) to P14.7424 in September from P14.7833 per kWh in August.
The reduction will lower the monthly bill of a household consuming 200 kWh by P8. Customers using 300 kWh, 400 kWh, and 500 kWh will see reductions of P12, P16, and P20, respectively.
“This follows a rate decrease Meralco implemented last month, and we hope that this will somehow provide relief to our customers,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said.
Meralco attributed the decrease mainly to lower ancillary service charges collected by the National Grid Corp. of the Philippines (NGCP), as well as lower taxes.
Ancillary service charges, which cover the cost of procuring power reserves to maintain balance in the electricity grid, declined by P0.3344 per kWh because of lower charges from the reserve market. Taxes and other charges recorded a net decrease of P0.1657 per kWh.
These reductions more than offset a P0.4232-per-kWh increase in the generation charge. Meralco attributed the higher generation cost mainly to the weaker peso and increased fuel costs following the recent escalation of the conflict in the Middle East.
The peso weakened by P1.025 on Aug. 28, closing at P62.265 against the dollar from P61.24 on July 31, according to data from the Bankers Association of the Philippines.
The increase in the generation charge was partly tempered by lower charges from the Wholesale Electricity Spot Market (WESM), which Meralco attributed to weaker demand in the Luzon grid. Two refunds being implemented by Meralco totaled P1.0139 per kWh.
Meralco’s distribution charge has remained unchanged since a P0.0360-per-kWh reduction for a typical residential customer took effect in August 2022.
Meralco is the Philippines’ largest private electric distribution utility, serving more than 8.2 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of MediaQuest Holdings, Inc., which is a subsidiary of the PLDT Beneficial Trust Fund, has an interest in BusinessWorld through the Philippine Star Group, which MediaQuest controls.
— Sheldeen Joy Talavera
