NextGen Day

Manila, Philippines – The Manila Electric Company (Meralco) has revealed that it will be implementing a reduction in power rates for the month of August. The company’s statement, released on Wednesday, explained that electricity rates would see a decrease of PHP 0.2908 per kilowatt hour (kWh), bringing the rate down to PHP 10.8991 per kWh from July’s PHP 11.1899 per kWh.

For residential customers consuming 200 kWh, this adjustment translates to an approximate PHP 58 decrease in their total electricity bill. Over the past two months, with the latest reduction included, the combined savings for customers amounts to PHP 1.0121 per kWh, according to Meralco.

This rate reduction can be attributed to a decline in generation charges, primarily influenced by lower generation since the previous month.

Meralco emphasized, “The generation charge has achieved its third consecutive decrease this month, going down by PHP 0.2137 to PHP 6.3929 per kWh from July’s PHP 6.6066 per kWh.”

This decline in generation charges is attributed to a drop of PHP 1.2873 per kWh in Wholesale Electricity Spot Market (WESM) rates. This reduction results from decreased electricity demand in Luzon, mainly due to the onset of the rainy season.

Meralco’s response to the favorable rates in the WESM was an increase in electricity sourcing from the spot market to 17%.

Power supply agreements (PSAs), which account for 47% of Meralco’s power supply, also experienced a decrease in prices by PHP 0.0853 per kWh. This reduction can be attributed to lower fuel costs and a stronger local currency. Notably, 26% of PSA charges are denominated in dollars.

However, the lower charges from WESM and PSAs were offset by higher rates from independent power producers (IPPs), which rose by PHP 0.0853 per kWh. IPPs contribute 36% of Meralco’s total supply for the given period.

In addition to these adjustments, the statement highlighted, “Transmission and other charges, which include taxes and subsidies, also registered a net reduction of PHP 0.0771.”

Amid these developments, Meralco also took the opportunity to remind eligible customers of the lifeline rate program, especially beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps), to register for the program. This registration allows customers to avail of discounts on their electricity bills.

According to Republic Act No. 11552, the lifeline rate program extends electricity subsidies to low-income customers who consume less than 100 kilowatt-hours of electricity per month and may find it challenging to cover their full electricity bills.

It’s important to note that the discounts on electricity rates for 4Ps beneficiaries are applicable for a period of 50 years under this program.

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As Meralco initiates a reduction in power rates for August, customers can anticipate some relief in their electricity bills. The decline in generation charges due to lower rates from various sources is a testament to Meralco’s efforts to provide cost-effective solutions to its customers. Additionally, the company’s reminders about the lifeline rate program underscore its commitment to assisting low-income customers in managing their electricity expenses.

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