Consumers will have a slight reprieve on their electricity bills in the new year as the Manila Electric Company (Meralco) announced a rate decrease of P0.2189 per kilowatt-hour (kWh).
This brings the overall rate for a typical household to P11.7428 per kWh, down from P11.9617 per kWh last month. Residential customers consuming 200 kWh will see a P44 reduction in their January electricity bills.
Meralco attributed the price reduction to lower charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs). WESM charges decreased by P0.8840 per kWh, while IPP charges fell by P0.1593 per kWh.
The decline in IPP charges is due to the appreciation of the peso, which impacts 97 percent of IPP costs that are dollar-denominated.
Lower fuel costs and increased dispatch of the First Gas-Sta. Rita plant also contributed to the decrease. These reductions offset the impact of a Power Supply Agreements (PSA) charge increase caused by lower plant dispatch.
As a result, the generation charge for January is P6.8358 per kWh, a decrease of P0.1313 per kWh.
"The reduction in WESM charges is due to an improved supply situation in the Luzon Grid," Meralco stated. "Average peak demand dropped by 471 megawatts (MW), and the average capacity on outage also decreased by 305 MW."
WESM, IPPs, and PSAs account for 34%, 30%, and 36% of Meralco's energy requirement, respectively.
Transmission charges also decreased by P0.0876 per kWh.
Meralco clarified, "Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are remitted to the government."
Distribution charges remain unchanged at P0.0360 per kWh.
In other news, consumers will see a refund of Regulatory Reset Expert costs on their bills next month.
Meralco will refund P987 million over one month at a rate of P0.2264 per kWh. These costs, previously included in the distribution wheeling rate, will no longer be collected.
"This reduction will be reflected as a separate line item in the bill," Meralco said.