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Stronger peso helps pare down Dec. Meralco bills

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Linemen of Meralco
Linemen of Manila Electric Co. check electricity meters at a squatters’ community in Metro Manila in this December 1, 2014 file photo.

MANILA ELECTRIC Co. (Meralco) announced on Thursday a P0.3785 per kilowatt-hour (kWh) cut in overall electricity rate for December after five straight months of increases.

In a statement, the distribution utility said the decrease translates into an overall rate of P9.2487/kWh, down from November’s P9.6272/kWh.

It said the rate decrease this month amounts to around a P76 reduction in the total bill of a household using 200 kWh — Meralco’s biggest residential customer segment.

Those consuming 300 kWh, 400 kWh and 500 kWh will see corresponding reductions of P113.55, P151.40 and P189.25, respectively.

“The lower December rate is mainly due to a P0.3035/kWh reduction in the generation charge,” Meralco said, explaining that a stronger peso and lower charges at the Wholesale Electricity Spot Market (WESM) brought down the generation charge.

This month, Meralco said the generation charge dropped to P4.6045/kWh from P4.9080/kWh in November largely because of the peso’s appreciation and the lower WESM charges.

The listed company said despite a slight increase in the demand for power in Luzon during the November supply month, WESM charges dropped by P0.4658/kWh.

It said the power supply situation improved from October, when the grid experienced three instances of “yellow” alerts, a warning issued by the grid operator to signify thinning power reserves.

WESM purchases accounted for 12% of Meralco’s requirement in the November supply month, the company said.

Meralco said charges from independent power producers (IPPs) and power supply agreements (PSAs) also recorded a drop of P0.2191/kWh and P0.3244/kWh, respectively, which the utility attributed to the strengthening of the peso against the US dollar. “The peso-dollar exchange rate affects around 97% of IPP and 60% of PSA charges. IPPs and PSAs each provided 44% of Meralco’s total requirement,” it said.

Meanwhile, the transmission charge of residential customers went down by P0.0186/kWh.

As a result, taxes and other charges also slipped by P0.0564/kWh.

“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 29 months, after these registered reductions in July 2015,” the company said, as it reiterated that it does not earn from the pass-through charges such as the generation and transmission charges.

Payment for the generation charge goes to power suppliers, while the transmission charge goes to privately owned grid operator National Grid Corporation of the Philippines.

Taxes and other public policy charges, including the feed-in-tariff allowance, are collected by the national government.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — VVS

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