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Meralco rates down for third straight month as generation charge drops for the fourth straight month

Manila Electric Company (MERALCO) announced today another downward adjustment of power rates, as the overall rate for a typical household decreased by P0.0286 per kWh, from last month’s P8.7252 per kWh to P8.6966 per kWh this July.  This is equivalent to a reduction of around P6 in the total bill of residential customers consuming 200 kWh.

With four straight months of generation rate reduction, and a total rate decrease of more than one peso per kWh since the start of the year, this month’s overall rate is significantly lower than that of July 2019, which was P9.9850 per kWh. This month’s overall rate is also the lowest since September 2017.

Lower generation charge as MERALCO claims force majeure

From P4.3413 per kWh in June, the generation charge decreased by P0.0069 per kWh to P4.3344 per kWh this July.

Because of the reduction in power demand in its service area during the Modified Enhanced Community Quarantine (MECQ) and General Community Quarantine (GCQ), MERALCO continued to invoke the Force Majeure (FM) provision in some of its Power Supply Agreements (PSAs), reducing the generation cost that would have been charged by suppliers. 
This July, the FM claim totaled about P265 million, equivalent to customer savings of P0.0877 per kWh in the generation charge.  This represents avoided charges from the temporary suspension of mid-merit supply contracts recently approved by the Energy Regulatory Commission (ERC).

Without the FM claims, the total rate would have increased by P0.0717 per kWh from last month’s rate. For the past 4 months, the savings from FM claims totaled around P1.85 billion.

Charges from the Wholesale Electricity Spot Market (WESM) decreased by P1.7803 per kWh due to reduction in line rental cost related to MERALCO’s supply contracts. The share of WESM to MERALCO’s supply needs went up to 15.9%.

Meanwhile, cost of power from Independent Power Producers (IPPs) increased by P0.4354 per kWh mainly due to lower average plant dispatch  with the 5-day scheduled maintenance outage of  San Lorenzo Modules 50 and 60. Purchases from PSAs also inched up by P0.0455 per kWh as a result of lower FM claim this month as compared with the previous month.  The Peso’s appreciation mitigated further increases in IPP and PSA charges.

IPPs and PSAs accounted for 33.2% and 50.9% of MERALCO’s total supply, respectively.

Movements in other charges

The transmission charge for residential customers registered a reduction of P0.0426 per kWh due to lower Ancillary Service Charges.  This more than offset the P0.0209 per kWh 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.

Collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.

MERALCO’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 60 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 Universal Charges and the FIT-All are remitted to the government.

MERALCO keeps its doors open for customers during General Community Quarantine (GCQ)
Customers may visit their nearest Meralco Business Center, which will continue to open its doors during the ongoing GCQ, and accept service applications, payments, and other transactions.

Strict safety measures continue to be implemented, like the “No Mask, No Entry” rule, Social Distancing and Temperature Check. Frontliners are available and ready, but strictly follow Social Distancing guidelines. Visitors can rest assured that these frontliners have passed the rapid COVID-19 testing authorized by the Pasig City Health Office. There are also acrylic barriers set up in the Meralco branches to protect both the customer and the frontliner.

But, for maximum safety and convenience, Meralco still encourages customers to use Meralco Online to transact from the safety of their homes. Multiple options for transactions have also been offered by the distribution utility, including the Meralco Mobile App via https://onelink.to/meralcomobile, Meralco Online via www.Meralco.com.ph, and the Meralco authorized payment channels at bit.ly/MeralcoPaymentPartners.

For more information and concerns, customers may visit MERALCO’s website at www.MERALCO.com.ph, its social media accounts, twitter @MERALCO and Facebook at www.facebook.com/MERALCO or may also call the MERALCO Hotline at 16211.

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