Power retailer Manila Electric Co. on Monday announced a third straight month of rate reduction on lower generation charges amid sluggish demand from commercial and industrial customers.
Meralco said the overall rate for a typical household dropped by P0.0216 per kilowatt-hour to P8.7252 per kWh in June from P8.7468 per kWh in May. This is equivalent to a reduction of around P4 in the monthly bill of residential customers consuming an average of 200 kWh.
“With three straight months of generation rate reduction, and a total rate decrease of more than P1 per kWh since the start of the year, this month’s total rate is also significantly lower than that of June 2019, which was P10.0918 per kWh. This month’s total rate is also the lowest since February 2018,” the company said in a statement.
Meralco said generation charges decreased by P0.0435 per kWh to P4.3413 per kWh in June from P4.3848 per kWh in May.
“Because of the very significant reduction in power demand in its service area during the enhanced community quarantine and modified ECQ period, Meralco invoked the force majeure provision in its power supply agreements for the duration of the lockdown, reducing fixed charges for generation capacity that would have been charged by suppliers,” Meralco said.
The force majeure claim totaled P614 million in June equivalent to customer savings of P0.2208 per kWh, representing reduction in fixed costs from its baseload supply contracts and avoided charges from the temporary suspension of the mid-merit supply contracts recently approved by the Energy Regulatory Commission.
“Without the FM claims, generation charge and the total rate would have increased by P0.18 and P0.24, respectively, from last month’s rate. For the past three months, the savings due to Force Majeure claims totaled around P1.6 billion,” the company said.
Meralco’s PSA charges also decline by P0.0613 per kWh because of the force majeure claim. Meralco sourced 50.4 percent of its power supply requirements from PSAs.
Meanwhile, the cost of power from Meralco’s independent power producers went down by P0.2334 per kWh on higher average plant dispatch. Meralco sourced 47.1 percent of its power requirements from IPPs in May.
Charges from the Wholesale Electricity Spot Market, the country’s trading floor for electricity, increased by P0.3132 per kWh on tighter supply conditions in the Luzon grid because of incidents of plant outages and a slight increase in demand.
Meralco tapped the WESM for 2.5 percent of its supply requirement last month.
Other pass-through charges registered an increase of P0.0219 per kWh. Meralco said the collection of the P0.0495 per kWh feed-in-tariff allowance, which is used to pay the renewable energy developers, also resumed this month.
The Energy Regulatory Commission suspended the collection of FIT-All for April and May billing months in consideration of the ECQ.
ERC also ordered the suspension of the collection of universal charge-environmental charge amounting to P0.0025 per kWh beginning June, until further notice.