Power rates of Manila Electric Co., the biggest retailer of electricity, fell by P0.29 per kilowatt-hour in May due to lower generation charges.
Meralco said in a statement the overall rates for a typical residential household now stood at P9.60 per kWh from last month’s rate of P9.89 per kWh.
“This amounts to a P58 decrease in the total bill of a typical residential household consuming 200 kWh,” the company said.
Meralco said generation charges declined due to the lower cost of power purchased from the Independent Power Producers and the PSAs (Power Supply Agreements).
The overall generation charge dropped P0.2126 per kWh in May to P4.8839 per kWh from P5.0965 per kWh in April, inclusive of the last installment of the incremental liquid fuel cost due to the Malampaya maintenance shutdown from January 28 to February 16, 2017.
Meralco said the cost of power bought from IPPs declined P0.87 per kWh, while the cost of electricity from PSAs decreased P0.14 per kWh.
“As a result of the quarterly repricing, natural gas prices increased this month to reflect higher world crude oil prices. Despite the increase in fuel prices, there was a reduction in IPP costs because of higher plant dispatch and the recent peso appreciation,” it said.
Meralco said the strengthening of the peso against the US dollar contributed to the drop in power cost from PSAs this month.
Meralco obtains 38.5 percent of its power requirements from the IPPs and 40.6 percent from PSAs.
The cost of supply from the Wholesale Electricity Spot Market, the country’s trading floor of electricity, however, increased P0.68 per kWh due to plant outages and higher power demand in Luzon.
Meralco secures 20.9 percent of its requirements from the WESM.
The company noted a slight increase in the transmission charge of residential customers this month by P0.02 per kWh, while taxes and other charges went down by a combined amount of around P0.10 per kWh.
Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 22 months, after they registered reductions in July 2015.
Meralco, which has over six million customers, 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 is remitted to National Grid Corporation of the Philippines.
Meralco earlier reported net income increased 6 percent in the first quarter to P4.8 billion from P4.5 billion a year ago, on higher electricity sales.
Meralco’s core net income was unchanged at P4 billion in the first quarter from a year earlier, as operating and business conditions proved to be challenging, the company said.
Energy sales in January to March reached 9,317 gigawatt-hours, up 3 percent from 9,077 gWh sold in the same period in 2016.
Meralco’s revenues grew 12 percent in the first quarter to P64.7 billion, while operating expenses stood at P6.2 billion.