Customers of power utility giant Manila Electric Company (Meralco) will experience financial relief in their electric bills this January, as the company’s overall tariff will go down by P0.0746 per kilowatt hour (kWh) to P9.7027 per kWh from the previous month’s P9.7773 per kWh.

For residential end-users in the 200-kWh usage bracket, their aggregate reduction in this billing cycle will amount to P15.00, according to the power firm.

Meralco explained that the rate downtrend had been attributed chiefly to lower generation charge in January, which was down by P0.1081 per kWh to P5.4262 per kWh from the month-ago level of P5.5343 per kWh, and that was “on the back of lower costs from power supply agreements (PSAs) and independent power producers (IPPs).”

The utility firm noted its supply procurements from contracted IPPs and its PSAs from private power generators “more than offset the higher charges from the Wholesale Electricity Spot Market.”

As expounded by Meralco, its PSA billings had declined by P0.4375 per kWh; while supply procurements from IPP contracts had been lower by P0.0543 per kWh, with it emphasizing that “the higher share of excess energy deliveries of AC Energy plants and lower coal prices contributed to the reductions.”

On the other pass-on cost components, Meralco specified that the transmission charge for residential customers inched up by P0.0728 per kWh, and that was “mainly due to higher ancillary service charges.”

For taxes and other charges, there was a net reduction of P0.0393 per kWh, according to the utility firm, while noting that the collection of the P0.0025 per kWh universal charge-environmental charge remains suspended, as previously directed by the Energy Regulatory Commission.

In terms of power supply sourcing, Meralco purchased bulk of its requirements in the last supply month from PSAs with 46.5-percent share; while IPPs delivered 41.3-percent; and the balance of 12.2-percent had been procured from the spot market.

Meralco emphasized that WESM charges escalated by P0.08511 per kWh last month, and that had been primarily attributed to “higher average capacity on outage in the Luzon grid.”

The power firm pointed out “forced and planned outages of major power plants repeatedly triggered the secondary cap, which was imposed on 16.96-percent of total trading intervals in the December supply month versus only 0.22-percent of the time in November.”

The company similarly conveyed that “damages from typhoon Odette and the continued Malampaya gas supply restriction contributed to the grid’s tight supply condition.”

Meralco further apprised consumers that “it does not earn from the pass-through charges, such as the generation and transmission charges, as payment for the generation charge goes to the power suppliers; while payment for the transmission charge goes to NGCP (National Grid Corporation of the Philippines).”

The taxes and other charges, such as the universal charge, are remitted to the government; while the feed-in-tariff allowance is collected by the National Transmission Corporation (TransCo) and will in turn be paid to the qualified renewable energy (RE) developers.