Consumers of the Manila Electric Co. (Meralco) will experience lower rates for July as the average household’s overall rate went down by P0.7067 per kWh following the refund ordered by the Energy Regulatory Commission.
The July rate reduction effectively reversed all increases in the overall power rates since the start of the year.
Meralco spokesperson Joe Zaldarriaga said this is equivalent to a decrease of around P141 in the total bill of a residential customer consuming 200 kWh.
“Good news to our customers. We are announcing a P0.71 per kWh, rounded off for residential consumers this month of July,” Zaldarriaga said.
ERC earlier directed Meralco to implement an additional Distribution True-Up refund totaling P21.8 billion for 12 months or until the amount is fully refunded.
ERC recalculated the difference between the Actual Weighted Average Tariff (AWAT) and the final Interim Average Rate (IAR) of P1.3522 per kWh from July 2015 to June 2022, following a downward adjustment in Meralco’s Regulatory Asset Base for the 3rd Regulatory Period.
The refund is equivalent to P0.8656 per kWh for residential customers and will appear as a separate line item called “Dist True-up 4” in the power bills starting this month.
“As a highly regulated entity, Meralco’s rates undergo a review and confirmation process to make sure they are fair and reasonable. The immediate implementation of the ERC Decision was able to more than offset the impact of higher generation charge this month to the benefit of our customers,” said Jose Ronald Valles, Meralco Head of Regulatory Management.
Meralco’s generation charge for July went up by P0.2166 to P6.7756 from the P6.5590 per kWh registered the previous month, driven by higher spot market rates and an increase in power supply agreements (PSAs) charges.
Charges from the Wholesale Electricity Spot Market (WESM) increased by P3.9649 per kWh amid tight supply conditions in Luzon.
Meralco sourced about seven percent of its supply requirements from the WESM, the trading floor of electricity, during the June supply month.
Meanwhile, charges from Meralco’s PSAs also increased by P0.3186 per kWh due to the peso depreciation and higher coal prices.
The peso depreciated by about five percent, the steepest decline in the peso’s value since June 2003, affecting around 32 percent of PSA costs that are dollar-denominated.