MANILA, Philippines - Manila Electric Co. (Meralco) customers will see a drop in electricity bills this month, thanks to a lower generation charge.
Meralco said the generation charge for July is down 24 centavos to P5.29 per kilowatt-hour (kWh) from P5.53 per kWh in the last billing month.
The power distributor attributed the decrease to the reduction in the cost of power purchased from the wholesale electricity spot market (WESM) and independent power producers (IPPs).
It said WESM prices fell to P8.41 per kWh for the supply month of June from P9.92 per kWh in May. IPPs likewise registered a 3.35 centavo decline in rates.
These, Meralco noted, more than offset the 17 centavo increase in the cost of power from the National Power Corp. (Napocor).
In percentage terms, Meralco obtained 5.2% of its requirements from WESM, 47.8% from IPPs, and 46.83% from Napocor.
Meralco reiterated that the generation charge is entirely a pass-through charge and does not accrue or go to the firm.
The cost of power sold by generating companies vary from month to month, depending on fuel prices, and the foreign exchange rate, among others.
Meralco added that should there be adjustments in the cost of generation from its various suppliers, it will reflect these changes in the bills, such as this month's reduction.
The generation charge is the electricity bill's biggest component, accounting for almost 60% of what customers pay for.