Refund cuts Meralco power rates in May

PHILIPPINE STAR/ RUSSELL PALMA

POWER users’ electricity bill in May is set to decrease by 12 centavos per kilowatt-hour (kWh) or around P24 for a typical household using 200 kWh, the country’s biggest utility firm said on Wednesday.

In a media release, Manila Electric Co. (Meralco) said the overall rate this month is down to P10.063 per kWh from P10.183 per kWh in April. Distribution-related refund has offset an increase in power generation charge, it said.

“The overall rate reduction was mainly due to the Energy Regulatory Commission’s (ERC) order to Meralco to refund a total of P7.8 billion,” the listed electricity distributor said.

The company said the refund is equivalent to P0.4669 per kWh for residential customers. The power seller’s customer count is around 7.46 million, of which 92% are residential users.

“This (refund) will appear as a separate line item in customers’ power bills,” it said.

This month’s rate adjustment translates to a P36 decrease in the power bill of residential customers using 300 kWh, while those consuming 400 kWh and 500 kWh can expect a decline of P48 and P60, respectively.

Ronald V. Valles, Meralco head of regulatory management, said: “As a highly regulated entity, Meralco’s rates are constantly being reviewed to make sure they are fair and reasonable.”

“The immediate implementation of the ERC’s order more than offset the impact of the increase of the generation charge this month, benefitting Meralco customers,” he added.

This month, the power generation charge is up by P0.3553 to P6.2277 per kWh from the P5.8724 per kWh in April.

Charges from power supply agreements (PSAs) rose by P0.8045, while those from independent power producers (IPPs) went down by P0.4319 per kWh.

Meralco said the price of Malampaya natural gas went up by 10% starting in the second quarter to reflect the surge in global crude oil prices.

It identified the power suppliers with pass-through adjustments for the offshore gas field’s fuel as First Gas Power Corp.’s Sta. Rita and San Lorenzo plants, and First NatGas Power Corp.’s San Gabriel plant. The plants accounted for 36% of Meralco’s supply in April.

Meralco added that the peso’s depreciation had an impact on the suppliers’ charges. It cited the increase in usage of more expensive liquid fuel after the Malampaya consortium’s continued failure to provide enough supply of natural gas.

It said the generation charge for May includes the second of three installments of the deferred generation costs for the March bill and the first of three installments for the deferred generation costs for the April bill. It placed the installments to be equivalent to an add-on of around P0.20 per kWh in the generation charge.

Charges from the wholesale electricity spot market (WESM) declined by P0.8664 per kWh with the lower demand in the Luzon power grid due to nonworking holidays and cooler temperature in April.

“PSAs, IPPs, and WESM accounted for 48%, 41%, and 11%, respectively, of Meralco’s energy requirement,” Meralco said.

Meanwhile, the transmission charge, taxes, and other charges for residential customers had a slight decrease of P0.0084 per kWh, it said, adding that the collection of P0.0025 per kWh for the universal environmental charge remains suspended as ordered by the ERC.

Meralco earns from distribution, supply, and metering charges, which have stayed unchanged since the reduction in July 2015.

Pass-through charges from power generation and transmission are paid to the suppliers and the grid system operator, respectively. Taxes, universal charges, and the feed-in tariff allowance are remitted to the government.

In the same media release, Meralco said that there were no major power interruptions in its service area during the May 9 national and local elections, which it attributed to “months-long preparations.”

“The distribution utility reported 35 isolated outage incidents, all of which were immediately addressed by field personnel that were strategically positioned across its franchise area,” it said.

It also called for more participants in the interruptible load program (ILP), or the voluntary, demand-side management scheme led by the Energy department. ILP taps businesses to collectively cut electricity drawn from the grid by using their own power generation sets during imminent power interruptions.

As of May 10, up to 121 companies with a combined de-loading capacity of 554 megawatts in Meralco’s franchise area have joined the program.

Meralco also called on consumers to practice energy efficiency methods amid the expected increase in power usage during the summer months.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

On Wednesday, Meralco shares fell by 2.86% or P9.80 to close at P333.20 each. — Victor V. Saulon

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