October 2022 Rates Updates
The Manila Electric Company (Meralco) announced today that the overall rate for a typical household went down by P0.0737 to P9.8628 from P9.9365 per kWh last month. For a residential customer consuming 200 kWh, the reduction is equivalent to a decrease of almost P15 in their total electricity bill.
Lower FIT-All, generation charge dragged overall rates
The overall rate for October was pulled down by a P0.0619 per kWh reduction in the Feed-in-Tariff Allowance (FIT-All). This came as the Energy Regulatory Commission (ERC), in a Resolution dated August 30, 2022, approved the collection of a P0.0364 FIT-All per kWh starting the October 2022 billing period, down from P0.0983 per kWh previously implemented.
The generation charge also went down by P0.0201 to P6.9192 from P6.9393 per kWh in September, on the back of lower costs from Meralco’s supply contracts.
Charges from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) decreased by P0.5073 and P0.0702 per kWh, respectively. The reduced use of more expensive alternative fuel by the First Gas-Sta. Rita and San Lorenzo plants and increased plant utilization of IPPs and PSAs more than offset the impact of the steep depreciation of the Peso in September. Dollar-denominated costs accounted for 98% of IPP and 38% of PSA charges.
IPPs and PSAs covered 47% and 49%, respectively, of Meralco’s energy requirement for the period.
The lower IPP and PSA charges were able to more than offset higher charges from the Wholesale Electricity Spot Market (WESM), which rose by P4.8128 to P11.9990 per kWh due to tight supply conditions in the Luzon grid. Both demand and capacity on outage increased, and the grid was placed on Red Alert on September 12. Spot market prices remained persistently high throughout the September supply month, such that the secondary price cap was triggered 55.16% of the total trading intervals, as compared with only 4.7% in August.
During the September supply month, Meralco sourced only 4% from the WESM from 10% the preceding month.
South Premiere Power Corporation (SPPC) and San Miguel Energy Corporation (SMEC) continued to supply power to Meralco at the ERC-approved rates, albeit under protest, following the ERC Orders dated September 29, 2022 denying the claims for price adjustments of the two suppliers.
“We would like to assure our customers that we will exhaust all remedies to prevent termination of the PSAs with SPPC and SMEC since we believe that preserving these contracts will still be least-cost for our customers,” Atty. Jose Ronald V. Valles, Meralco FVP and Regulatory Management Office, said.
“Should SPPC and SMEC decide to pursue the contract termination, we will ensure continuity of stable, reliable and adequate supply for our customers by getting supply from other sources like the WESM and other generation companies,” he added.
Transmission and other charges
Transmission, taxes, and other charges for residential customers registered a slight upward net adjustment of P0.0083 per kWh.
Pass-through charges for generation and transmission are paid to the power suppliers and the system operator, respectively, while taxes, universal charges, and FIT-All are all remitted to the government.
Distribution utilities like Meralco only earn from distribution, supply, and metering charges. For Meralco, its charges went down by P0.0360 per kWh for a typical residential customer beginning August 2022. Prior to this adjustment, charges were unchanged since the reduction in July 2015. The ongoing distribution-related refunds, equivalent to a total of P1.8009 per kWh for residential customers, also continue to temper customers’ monthly bills.
Customers urged to practice electrical safety and energy efficiency
With the ongoing rainy season, Meralco advises its customers to practice safety measures and prepare for floods or typhoons. Customers are urged to charge mobile phones, flashlights, and other important gadgets or rechargeable appliances. During typhoons, use rubber boots and gloves for added protection. In case of flooding, switch off circuit breakers and make sure electrical wires and devices are dry before touching them. If outlets or appliances got drenched, have a licensed electrician check these before using.
Meralco also empowers its customers to continue practicing energy efficiency. Customers can know how much their gadgets and appliances consume through the Appliance Calculator on the Meralco Mobile App, as this will help them stay in control and better manage their monthly consumption.