Cooler temperatures in the past weeks have dampened overall electricity demand benefitting customers of Manila Electric Company (Meralco) with P0.2908 per kilowatt hour (kWh) rate reduction in their August bills.

Relative to the rate downtrend, the utility firm said that residential end-users in the typical 200-kilowatt hour (kWh) consumption bracket will generate P58 savings in their electric bills this month.

On account of the tamed generation charge, which is the biggest component of the pass-on rate, the resulting average tariff of Meralco for residential end-users would hover at P10.8991 per kWh in the current billing cycle from P11.1899 per kWh last month.

“With the latest adjustment, the combined reduction over the past two months now stands at P1.0121 per kWh,” the power firm highlighted.

In particular, the generation charge of the company for August declined by P0.2137 to P6.3929 per kWh versus P6.6066 per kWh in the July billing.

For the other line items in the electric bills, it was specified that transmission and other charges - including taxes and subsidies - logged a net reduction of P0.0771 per kWh; while the collection of P0.0364 per kWh feed-in-tariff allowance (FIT-All) remains suspended in this billing month.

Meralco expounded there was P1.2873 per kWh drop in the charges of the Wholesale Electricity Spot Market (WESM), which was mainly precipitated by demand crunch of 200 megawatts due to the rainy season.

“The decrease in spot market prices also reduced the imposition of the secondary price cap to 2.41-percent of the time in the July supply month from 9.21-percent in the previous month,” the utility firm stressed; adding that its spot market exposure levelled off at 17-percent in the July supply month.

For capacity procurements from its power supply agreements (PSAs), Meralco further reported that this was pared by P0.1688 per kWh “due to lower fuel prices,” and that was also propped by the appreciating value of the Philippine peso, since at least 26-percent of the PSA charges are anchored on the US dollar.

The utility firm conveyed that the cost reductions posted by WESM and its PSAs somehow offset the P0.0853 per kWh estimated increase in the charges of its contracted independent power producers,  mainly “due to lower average IPP dispatch as several units of First Gas-Sta Rita and First Gas-San Lorenzo underwent scheduled outage during the July supply month.”

The utility company similarly qualified that the downswing in Malampaya gas prices, which was also reinforced by the peso’s appreciation versus the US dollar, provided a counterweight to the cost strain that could have been triggered by the reduced dispatch of the gas plants.

The portfolio of the company’s supply sourcing last month was dominated by its PSAs with 47 percent share, while delivered IPP capacities had 36 percent share in the pie.