Customers of Manila Electric Company (Meralco) will experience slight relief in their electric bill payments this month, October, as the utility firm’s overall tariff will be pared down by P0.0737 per kilowatt hour (kWh) to P9.8628 from P9.9365 per kWh in the September billing cycle.
That rate cut will then benefit household end-users in the 200-kilowatt hour consumption bracket with an aggregate bill reduction of P15, according to Meralco.
Meralco explained that the rate cut has been triggered by the P0.0619 per kWh decline in the feed-in-tariff allowance (FIT-All) being collected from all ratepayers, that in turn will be utilized as subsidy payment to qualified renewable energy (RE) developers.
“This came as the Energy Regulatory Commission (ERC), in a Resolution dated August 30, 2022, approved the collection of a P0.0364 FIT-All per kWh starting the October 2022 billing period, down from P0.0983 per kWh previously implemented,” the power utility company noted.
Additionally, the generation charge component in the rates marginally softened by P0.0201 per kWh to P6.9192 versus P6.9393 per kWh last month – and that had been mainly attributed to the lower costs billed by its power suppliers.
On the other tariff components, the utility firm emphasized that transmission, taxes, and other charges for residential customers logged a minuscule upturn of P0.0083 per kWh.
Specifically on the power firm’s suppliers, Meralco indicated that capacity procurement from its contracted independent power producers (IPPs) had been lower by P0.5073 per kWh; while its PSA costs declined by P0.0702 per kWh.
“The reduced use of more expensive alternative fuel by the First Gas-Sta. Rita and San Lorenzo plants and increased plant utilization of IPPs and PSAs more than offset the impact of the steep depreciation of the peso in September,” the power firm expounded.
It is worth noting that for its contracted IPPs, roughly 98 percent of their costs had been denominated in US dollars while about 38 percent of the component of its PSA charges had been linked to the greenback.
Meralco’s supply sourcing last month had been mainly from its PSAs with 49-percent share; followed by its IPPs with 47-percent fraction in the pie; while the balance of capacity purchases had been from the Wholesale Electricity Spot Market.
“The lower IPP and PSA charges were able to more than offset higher charges from the WESM which rose by P4.8128 to P11.9990 per kWh due to tight supply conditions in the Luzon grid,” Meralco pointed out.
It added that “both demand and capacity on outage increased” resulting in the red alert situation last Sept. 12 that plunged some end-users into unwarranted brownout predicament.