Manila Electric Co. announced a power rate reduction of P0.0623 per kilowatt-hour in September, which will translate into P12 savings in the monthly bill of households consuming 200 kWh or less.
It said the overall rate for a typical household dropped to P8.4288 per kWh in September from P8.4911 per kWh in August. The rate is the lowest in three years or since September 2017.
“We have good news to our Meralco customers because for the fifth straight month, our overall rates went down. For generation charge this is the sixth straight month that rates went down,” Meralco spokesman Joe Zaldarraiga said.
Meralco’s generation charge declined P0.0381 per kWh to P4.0860 per kWh in September from P4.1241 per kWh in August as the power retailer continued to impose force majeure claims.
Force majeure represents reduction in fixed costs from base load supply contracts and avoided charges from the temporary suspension of mid-merit contracts recently approved by the Energy Regulatory Commission.
The power retailer said that because of the reduced power demand in its service area during the community quarantine period, it continued to invoke the force majeure provision in some of its power supply agreements.
Meralco’s force majeure claims totaled P463 million in September, equivalent to customer savings of P0.1710 per kWh in the generation charge.
Meralco said without the force majeure claims, the generation charge and the total rate would have increased by P0.13 and P0.14 per kWh, respectively. The savings from force majeure claims reached P2.4 billion for the past six months, .
Meralco said PSA charges decreased by P0.3032 per kWh in September on force majeure claims. PSAs accounted for 54.8 percent of Meralco’s energy requirement during the July supply period.
Meralco head of utility economics Larry Fernandez said the force majeure claim imposition depend largely on reduced demand, especially the unforeseen reduction. Meralco’s peak demand went down to 6,862 megawatts in August from 7,116 MW.
“During the months of ECQ and MECQ, the force majeure claims were big, reaching P900 million but when we had GCQ, it went down to as low as P100 million in July. We will continue to monitor demand in the area and see if we can justify invoking the force majeure,” Fernandez said.
The company said charges at the Wholesale Electricity Spot Market, the country’s trading for electricity were P0.0147 per kWh lower this month because of the decrease in Luzon demand as some areas, including Metro Manila and adjacent provinces, returned to the modified enhanced community quarantine from Aug. 4 to 18. Meralco sourced 11.6 percent of its power needs from the WESM during the period.
Meanwhile, Meralco’s purchases from independent power producers inched up by P0.0601 per kWh mainly because of the lower average plant dispatch. IPPs accounted for 33.6 percent of Meralco’s total supply.
Transmission charges for residential customers went down by P0.0112 per kWh on lower ancillary service charges while there was also a net decrease of P0.0130 per kWh in taxes and other charges.
Meralco said collection of the universal charge-environmental charge amounting to P0.0025 per kWh remained suspended, as directed by the Energy Regulatory Commission.
Meralco’s distribution, supply and metering charges have remained unchanged for 62 months.