Manila Electric Company (MERALCO) announced a Php 0.3587 per kilowatt-hour (kWh) reduction in electricity rates for October.
As a result, the overall rate for a typical household drops to Php 11.4295 per kWh, offering relief from last month’s Php 11.7882 per kWh rate. Households with an average consumption of 200 kWh will notice a reduction of around Php 72 in their October electricity bill.
The drop in this month’s total rate is attributable to a Php 0.3059 per kWh reduction in the generation charge caused by decreased Wholesale Electricity Spot Market (WESM) prices.
WESM charges dropped by Php 5.1001 per kWh after the completion of the deferred May 2024 cost collection, as directed by the Energy Regulatory Commission (ERC).
The notable drop in WESM charges has more than compensated for the rising costs associated with First Gas plants Sta. Rita and San Lorenzo, which are due to the ERC’s recent approval of higher pass-through Malampaya fuel prices starting this October 2024 under their revised Gas Sale and Purchase Agreements (GSPAs) with the Malampaya consortium.
The decrease was also supported by an improved supply situation in the Luzon grid, with average demand and capacity on outage reducing by 544 MW and 519 MW, respectively.
Moreover, the ERC has also allowed for the gradual amortization of the cost differentials between the old and new GSPAs over a 12-month period, addressing the supply costs from January to August 2024.
The rise in charges from Independent Power Producers (IPPs) by Php 1.8556 per kWh was primarily due to additional Malampaya costs. A slight uptick of Php 0.1128 per kWh in charges from Power Supply Agreements (PSAs) was also recorded.
For this reporting period, MERALCO’s energy mix comprised 24% from the Wholesale Electricity Spot Market (WESM), 26% from IPPs, and 50% from PSAs.
Transmission charges saw a reduction of Php 0.0383 per kWh, attributed to lower ancillary service charges, while taxes and other charges also decreased by Php 0.0145 per kWh.
