Filipino households can look forward to lower electricity bills this September as the Manila Electric Company (Meralco) announced a rate reduction, thanks to a drop in generation charges.
Meralco, led by Manuel V. Pangilinan, revealed that overall rates will decrease by P0.1852 per kilowatt-hour (kWh), bringing the new rate down to P13.0851 per kWh from last month’s P13.2703 per kWh.
According to Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga, this means a typical household consuming 200 kWh can expect about P37 off their electricity bill. Homes using 300 kWh, 400 kWh, and 500 kWh may see reductions of around P56, P74, and P93, respectively.
“We hope that along with relatively lower consumption during this period, this rate cut will bring relief to our customers,” Zaldarriaga said.
Lower generation charge drives rate rollback
The decrease is mainly due to a P0.2603 per kWh drop in generation charges, driven by lower costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).
Charges from IPPs declined by P1.3459 per kWh, while PSA charges went down by P0.3660 per kWh. The dip was largely attributed to the stronger peso against the US dollar and falling international fuel prices. About 99% of IPP costs and 57% of PSA costs are dollar-denominated, making them sensitive to currency fluctuations.
These savings more than offset the rise in Wholesale Electricity Spot Market (WESM) charges and the start of collections for contract price adjustments of Sual Power, Inc. (SPI) and South Premiere Power Corporation (SPPC).
WESM charges climbed by P0.3785 per kWh as average demand in the Luzon grid increased by 182 MW and average capacity on outage went up by 132 MW.
Meanwhile, SPI and SPPC’s price adjustments stem from a Supreme Court ruling upholding their right to invoke the “Change in Circumstance” clause in their supply agreements. The Energy Regulatory Commission has allowed them to collect P5.1 billion—spread over six months starting this September—equivalent to about P0.26 per kWh for this month.
For the period, PSAs accounted for 65% of Meralco’s total energy requirement, IPPs for 29%, and WESM for 6%.
Transmission and other charges
The transmission charge, another pass-through cost, increased by P0.1130 due to higher ancillary service charges from the Reserve Market.
Other charges, including taxes, posted a net decrease of P0.0379 per kWh. Pass-through charges for generation and transmission go directly to power suppliers and the grid operator, while taxes, universal charges, and the Feed-in Tariff Allowance are remitted to the government.
Meralco also reiterated that its distribution charge has remained unchanged since it implemented a P0.0360 per kWh reduction for residential customers in August 2022. Customers also continue to enjoy a distribution-related true-up adjustment equivalent to another P0.2024 per kWh reduction.
Electrical safety during the rainy season
With the rainy season in full swing, Meralco reminded customers to stay vigilant about electrical safety, especially in flood-prone areas.
“Switch off the main electrical power switch or circuit breaker in case of flooding, keep hands dry when touching electrical appliances, and always have drenched outlets or appliances checked by a licensed electrician before using,” Zaldarriaga advised, stressing that simple precautions can prevent accidents and save lives.
Encouraging energy efficiency
Beyond rate cuts, Meralco urged customers to embrace energy efficiency to better manage their power use and bills.
“Among the practical tips customers can practice are regular cleaning of air conditioner filters and electric fan blades, ironing clothes in bulk, refraining from overfilling refrigerators, and using LED bulbs for cost-saving lighting,” Zaldarriaga said.
Consumers can also use the Meralco Appliance Calculator to monitor the energy consumption of their household gadgets and appliances.
For any electricity service concerns, customers may use Meralco’s digital platforms, including the My Meralco app and official social media pages, or call the Meralco hotline 16211.