The 7.1 million customers of Manila Electric Company (Meralco) will experience cost relief in their pockets this month -- with the calculated tariff reduction of P0.3598 per kilowatt hour (kWh), primarily for residential consumers in the utility firm’s March billings.
According to the company, its subscribers in the 200-kWh consumption base will enjoy an overall cost reduction of P72 in their current billing cycle. The overall tariff of Meralco had been pared to P8.3195 per kWh this March from P8.6793 per kWh last month.
Part of the component that helped bring down the rates for Meralco customers this month is the refund of the company amounting to P13.9 billion that was recently approved by the Energy Regulatory Commission (ERC) – and will be carried in the electric bills for 24 months.
The utility firm specified that “for residential customers, the refund rate is P0.2761 per kWh,” and will appear as a separate line item in the billings under ‘distribution true-up’ component.
‘The amount represents the difference between the actual weighted average tariff and the ERC-approved interim average rate for distribution-related charges for the period July 2015 to November 2020,” the utility firm expounded.
On the generation charge component of the bill, Meralco specified that this declined by P0.0403 per kWh this month to P4.3749 per kWh from the February level of P4.4152 per kWh.
“The reduction was due to the higher share of supply from the Wholesale Electricity Spot Market (WESM), which registered the lowest charge among suppliers,” the power firm stressed, adding that “despite increase in Luzon peak demand from 9,162 megawatts to 9,574MW, charges from the WESM remained relatively stable at P2.4609 per kWh.”
On the other segregated rate items, Meralco specified that transmission charges marginally went up by P0.0022 per kWh; while taxes and other charges incurred a net decrease of P0.0456 per kWh in March billing.
Meralco further explained that the lower WESM prices had been able to offset cost increases on its supply purchases from contracted independent power producers (IPPs) as well as with its power supply agreements (PSAs) – which went up by P0.1338 per kWh and P0.0175 per kWh, respectively.
The company noted “the higher PSA and IPP charges were the result of the peso’s depreciation and lower average plant dispatch.”
Supply-procurement wise, Meralco sourced bulk of its supply last month from PSAs with 52.5-percent share; then its IPPs cornering 35.8-percent in the pie; and the balance of 11.7-percent from the spot market.