The decision of the Manila Electric Company (Meralco) to go against the grain and impose power rate cuts amid steadily rising pump fuel prices wasn't lost to former AGHAM Party-list Rep. Angelo Palmones.
In a statement, Palmones hailed the power distribution giant for announcing a P0.12 rate reduction for the month of February.
The decrease is equivalent to about P24 pesos in the total bill of a typical customer with a 200 kilowatt-hour (kWh) monthly consumption.
“Usually, when oil prices go up, cost of electricity also increases since power plants that supply to Meralco are also affected by movements of global fuel prices,” noted Palmones.
“A look at the breakdown of Meralco’s rate reduction this month showed that its generation charge actually went down by 23 centavos, owing to its strategic sourcing from suppliers that somehow protected its customers from price spikes,” he said.
Even the Independent Electricity Market Operator of the Philippines (IEMOP) late last month announced that forced plant outages of major power plants led to increased prices in the Wholesale Electricity Spot Market (WESM), where electricity distributors like Meralco buy a portion of their power requirements.
Data from the Department of Energy (DOE) as of Feb. 1 showed that since the start of the year, gasoline prices have increased by P5.70 per liter, diesel by P7.95 per liter, and kerosene by P7.20 per liter. The volatile international oil market has been cited as reason for the pump price hikes.
In its recent announcement, Meralco said less purchases from the WESM partly contributed in the decrease in electricity rates in February. The distributor said it sourced only 0.4 percent from the spot market, where prices had been high due to the tight supply condition.
“The second consecutive month of rate reductions is a very welcome relief for us, consumers, who are usually helpless when it comes to increases in the prices of goods and services,” said the former lawmaker.
Last month, Meralco implemented a rate reduction of around P0.07 centavos per kWh.