RESIDENTIAL customers in areas served by Manila Electric Co. (Meralco) will see lower electricity bills this month by around P24, thanks to the decrease in generation charge and spot market prices.
The overall rate for a typical household fell by P0.1180 per kilowatt-hour (kWh) to P11.3168 per kWh in April from P11.4348 per kWh in March, Meralco said in a statement on Tuesday.
Households that consume 200 kWh of electricity will see a decrease of about P24 in their monthly power bills, while those that consume 300 kWh, 400 kWh, and 500 kWh will have reductions of P35, P47, and P59, respectively.
Meralco said that April power rates are lower because of the reduced generation charge of P7.3295 per kWh, compared to last month’s P7.3790 per kWh, even after collecting the deferred generation cost of P0.20 per kWh.
Last month, the Energy Regulatory Commission said that Meralco had proposed to stagger the collection of an estimated P1.1 billion in generation charges over the next two months to “cushion its impact” on consumers.
The collection of deferred generation cost was offset by lower spot market prices and power supply agreements (PSAs), Joe R. Zaldarriaga, Meralco’s spokesperson and vice president for corporate communications, said during a virtual briefing on Tuesday.
For this month, Meralco sourced more of its supply from the Wholesale Electricity Spot Market (WESM), accounting for 32% of its total requirement.
WESM charges declined by P1.0462 per kWh to P7.1817 per kWh as the supply situation in the Luzon power grid improves, Meralco said.
Charges from PSAs, which account for 41% of Meralco’s supply, also declined by P0.0741 per kWh to P6.2037 per kWh.
Peso appreciation impacted 43% of dollar-denominated PSA costs, causing a drop in power deal rates.
The peso closed at P54.36 against US dollar on March 31, gaining 97 centavos from its close of P55.33 on Feb. 28.
“Also contributing to the reduction were higher share of excess energy deliveries of some PSAs, which are priced at a discount, and higher average plant dispatch, as First NatGas-San Gabriel returned to normal operations following its planned outage during the 15-day shutdown of the Malampaya facility last February,” Meralco said.
To recall, the Malampaya gas-to-power facilities went on maintenance shutdown from Feb. 4 to 18. Power plants being supplied by Malampaya ran on alternative fuel during the period such as the 420-megawatt San Gabriel plant of First Gen Corp.
Charges from the independent power producers (IPPs) increased by P0.6710 per kWh to P9.0266 per kWh. IPPs supplied 27% of Meralco’s energy requirement.
Mr. Zaldarriaga said that it is too soon to determine if electricity prices will rise next month. However, he acknowledged that historically, there is a spike in electricity usage in May because of warmer temperatures.
“For the record we’d rather wait for all the billings from all our suppliers before we come up with a definite scenario as far as rates are concerned but consumption usually increases and given that situation it is very obvious when demand rises, consumption rises,” he said.
“Part of the seasonality is that when demand goes up especially in the spot market there’s pressure for prices to go up. In the Luzon grid, historically, demand rises in May and June,” said Lawrence S. Fernandez, vice-president and head of utility economics of Meralco.
Meralco will ensure the least cost power for the consumers even after the Department of Energy announced that it will no longer issue a certificate of exemption on the competitive selection process, he said.
“The mandate for DUs (distribution utilities) to supply our captive market in a least cost manner remains, so given the current tools and sources we have, we will continue to optimize them to the benefit of our customers,” he added.
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 interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose