The Manila Electric Co (Meralco) announced a decline in overall electricity rates for January.
The drop amounted to P9.8385 per kilowatt-hour (kWh) from P10.1803 per kWh in December 2018, Meralco said.
The reduction of P0.3418 per kWh will mean that a typical household consuming 200kWh can save around P68 in the total bill.
Recent downward adjustments are mainly due to the cost reduction of Meralco’s Power Supply Agreements (PSAs).
LOWER GENERATION AND WESM CHARGE
The generation charge went down to P4.9119 per kWh this January from P5.3303 per kWh last month, a decrease of P0.4184 per kWh.
The reduction in the cost of power of PSAs amounting to P1.2293 prompted a cheaper generation charge. PSAs supply 40 percent of Meralco's total requirement this month.
"Lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission (ERC)," said Meralco Public Information Office Head Joe Zaldarriaga.
"The early completion of annual capacity payment for Sual Unit 1, Ilijan, Pagbilao Unit 1 and PEDC resulted in savings immediately passed on to consumers by way of lower electricity rates," added Zaldarriaga.
Due to improvement in the Luzon power situation, charges from the Wholesale Electricity Spot Market (WESM) also went down by P0.0165 per kWh. The demand for electricity in the Luzon grid decreased by 101 MW.
The cost of power from independent power producers (IPPs), however, slightly increased by P0.0847 per kWh because of peso depreciation, since about 92 percent of IPP charges are dollar-denominated.
WESM provided 18 percent of Meralco’s supply needs, while IPPs delivered 42 percent.
TRANSMISSION CHARGE AND OTHER FEES ADJUSTMENTS
The surge in NGCP Ancillary Services Charges led to the increase in transmission charges of residential patrons by P0.1210 per kWh this January. Taxes and other charges, on the other hand, decreased by P0.0444 per kWh.
Meralco’s distribution, supply, and metering charges have remained unchanged for 42 months, after these registered reductions in July 2015.
Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP.
Taxes and other public policy charges like the FIT-All rate are remitted to the government.
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