Consumers will have slightly lower power rates in July after Manila Electric Co. announced Friday that the overall rate for a typical household went down by P0.0286 per kilowatt hour, to P8.6966 from P8.7252, last month.
This is equivalent to a reduction of around P6 in the total bill of residential customers consuming 200 kilowatt hours.
Meralco spokesman Joe Zaldarriaga said that, with four straight months of generation rate reduction—and a total rate cut of more than P1 per kilowatt hour since the start of the year—this month’s overall rate was significantly lower than in July 2019, which was P9.9850 per kilowatt hour.
This month’s overall rate will also be the lowest since September 2017.
“What led to the lower rate is the lower generation charge, and in particular Meralco’s claim of force majeure for our contracted suppliers,” Zaldarriaga said.
Meralco’s generation charge decreased by P0.0069 per kilowatt hour to P4.3344 this month from P4.3413 in June.
Meralco continued to invoke the force majeure provision in some of its Power Supply Agreements because of the reduction in demand in its service area during the quarantine period.
Meralco’s force majeure claim totaled about P265 million for July, which is equivalent to customer savings of P0.0877 per kilowatt hour in the generation charge.
Meralco’s head of utility economics Lawrence Fernandez said this represented avoided charges from the temporary suspension of mid-merit supply contracts recently approved by the Energy Regulatory Commission.
Without the force majeure claims, the total rate would have increased by P0.0717 per kilowatt hour from last month’s rate.
For the past four months, the savings from force majeure claims have totaled around P1.85 billion.
Charges from the Wholesale Electricity Spot Market declined significantly, and by P1.7803 per hour, due to the reduction in line rental costs related to Meralco’s supply contracts.
Meralco sourced 15.9 percent of its power requirements from the spot market, the trading floor for electricity, in June.
Meanwhile, the cost of power from Independent Power Producers increased by P0.4354 per kilowatt hour, and mainly due to the lower average plant dispatch with the five-day scheduled maintenance outage of San Lorenzo Modules 50 and 60.
Meralco said the peso’s appreciation mitigated further increases in its charges.
Meralco sourced 50.9 percent and 33.2 percent of its power supply from its Power Supply Agreements and Independent Power Producers, respectively.
Meanwhile, the transmission charge for residential customers registered a reduction of P0.0426 per kilowatt hour due to lower ancillary service charges.
Meralco said this more than offset the P0.0209 per-kilowatt hour net increase of taxes and other charges following the completion last month of the ERC-approved adjustment on Meralco’s system loss over/under-recoveries.