Metro Manila (CNN Philippines) —The Manila Electric Company (Meralco) announced a drop in electricity rates for the month of October due to lower transmission and generation charges.
Following a decrease of ₱0.1216, the new rate is pegged at ₱8.34 per kilowatt hour, pegging ₱24.33 off for a household with a 200 kWh consumption. The rest of the projections for decrease are as follows: 300 kWh – ₱36.49; 400 kWh – ₱48.65; 500 kWh – ₱60.82.
The decrease is primarily due to lower transmission and generation charges. Transmission charges were reduced by ₱0.0558 per kWh due to lower ancillary charges from the National Grid Corporation of the Philippines.
Generation charges are currently at ₱3.8938, ₱0.0501 lower than last month. The decrease can be attributed to lower charges from the Wholesale Electricity Spot Market.
Taxes and other charges also went down by ₱0.0157 per kWh. There are no adjustments to the Meralco distribution, supply, and metering charges.
According to Meralco, October is the third straight month of reduction in the overall residential rate.
However, there are expected increases from plants under the Power Supply Agreements (PSA) costing ₱0.3257 per kWh, and from the Independent Power Producers (IPP) at ₱0.1671 per kWh.
This is due to a hike in coal prices and a weaker peso against United States dollar rate. “Peso depreciation has an upward impact on the conversion of the dollar charges of the PSA and IPP plants,” a statement from Meralco said.
The lower power rates followed survey results released by the Australia-based International Energy Consultants (IEC), who found that there was a 28 percent decline in Meralco rates since January 2012.
The survey, which covered 44 countries, found an overall average decline of 19 percent, translating to a 22 percent decrease in Meralco tariff.
A press release from Meralco said that the current tariff is only 11 percent above the average rate of the survey, “which reflects an improvement from a similar survey done by IEC in 2012.” Hence, the decline in rates has narrowed the gap between Meralco rates and those in other countries.
IEC found that among the contributors to lower power prices were Meralco’s sourcing strategy, lower distribution charges, lower system loss, and lower fuel costs, particularly for coal. Customers were estimated to save a total of ₱30 billion.
