February 21, 2018, 1:15 pm
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Power rates down

After five consecutive rate hikes, Manila Electric Co. (Meralco) said power rates for December will go down by P0.3785 per kilowatt hour (kWh), effectively decreasing overall rates to P9.2487 per kWh from P9.6272 per kWh

 The downward adjustment is mostly attributed to the P0.3035 per kWh reduction in generation charges driven by the stronger peso and lower spot market prices. The rate rollback this month will be equivalent to a P76 decrease in the total bill of a typical residential household consuming 200 kWh monthly.

 The generation charge decreased from P4.9080 per kWh in November to P4.6045 per kWh this December.

 Despite a slight increase in the demand for power in Luzon in November, charges from the wholesale electricity spot market (WESM) decreased by P0.4658 per kWh. The power supply situation improved from October, when the grid experienced three instances of yellow alerts.

 Likewise, charges from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) registered decreases of P0.2191 per kWh and P0.3244 per kWh, respectively, mainly due to the strengthening of the peso against the US dollar. The peso-dollar exchange rate affects around 97 percent of IPP and 60 percent of PSA charges.

 On the other hand, transmission charge of residential customers decreased by P0.0186 per kWh due to lower transmission wheeling and ancillary charges. Consequently, taxes and other charges also went down by P0.0564 per kWh this month.

 Meralco’s interim distribution rates comprised of distribution, supply and metering charges, the only bill component paid to the company, remained at P1.381 per kWh for 29 months already.

 Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines. Taxes and other public policy charges like the Feed-in-Tariff-Allowance are collected by government 

Of Meralco’s total power requirements last month, 12 percent was from WESM, 44 percent from IPPs and 44 percent from power plants under PSAs.
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