The customers of Manila Electric Company (Meralco) will have one less worry on rising household budgets this month, as the tariff of the company will go down by P0.7213 per kilowatt hour (kWh) in its July billing cycle.
The cost downswing will pare the utility firm’s overall rates pass-on to P11.1899 per kWh from P11.9112 per kWh that had been reflected in the bills last month.
According to Meralco, for residential users in the 200-kWh usage bracket, the aggregate reduction they will experience in their bills will be P144 – an amount that they can already spend for other basic needs at home.
The power firm indicated there was downtrend in the generation charge and that was mainly propelled by the P2.6597 per kWh decline in charges from the Wholesale Electricity Spot Market (WESM) due to lower demand following the onset of the rainy season.
“Lower spot market prices reduced the imposition of the secondary price cap to only 9.21-percent of the time from 28.28-percent,” the company said.
It qualified that its procurement from the spot market had been higher at 15-percent in the last supply month, hence, the firm was able to take advantage from lower spot prices.
Further, Meralco’s sourcing of supply from contracted independent power producers (IPPs) went down by P0.4658 while charges from its power supply agreements (PSAs) had been trimmed by P0.3915 per kWh – and that had been mainly attributed to the appreciation of the Philippine peso’s value versus the US dollar as well as the softening of coal prices in the world market.
The fraction of supply secured from the IPPs stood at 37-percent while the lion’s share came from PSAs with the other generation companies (GenCos) at 48-percent.
For the other line items in the bill, Meralco noted that transmission charges along with taxes and subsidies similarly logged aggregate reduction of P0.0777 per kWh while the collection of feed-in-tariff allowance (FIT-All) for renewable energy-delivered capacities remains suspended until August this year.
There is no certainty yet that the downtrend in generation charges could be sustained, especially with the threatening impact of the El Nino phenomenon that may spark off higher temperatures through the second half of the year.
The power utility firm has been closely monitoring movements in the generation cost, because that accounts for more than 50-percent of all the charges being reflected in the bills.
Meralco reminded consumers that “pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively while taxes, universal charges, and FIT-All are all remitted to the government.”
On the distribution charge, which goes directly into the coffers of Meralco, that has been steady from the level that was approved by the Energy Regulatory Commission (ERC) since August last year.