Meralco to cut rates in May, possibly June as well

May 10, 2017 - 10:59 AM
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MANILA, Philippines — The Manila Electric Co. said it is cutting power rates this month by 29 centavos per kilowatt-hour and, depending on the supply-demand situation, might implement another reduction next month.

This month’s rate cut translates to savings of between P58 to P145 depending on consumption. Here’s a breakdown:

CONSUMPTION                 SAVINGS

    200KWH                           P 58.00

    300KWH                           P 87.00

    400KWH                           P116.00

    500KWH                           P145.00

Meralco attributed the May rate cut mainly to a 21-centavo per kilowatt-hour reduction in generation charges for the April supply month.

Adding to this was a decline in costs from independent power producers and power supply agreements that officials said reflected higher dispatch levels and a stronger peso, said Larry Fernandez, Meralco Utility Economics head.

The lower generation and IPP and PSA costs also offset a 2-centavo per KWH increase in transmission charges and the last tranche of a monthly 22-centavo per KWH increase due to the Malampaya maintenance shutdown.

Joe Zaldarriaga, external communications head of Meralco, said these factors might also pave the way for another rate reduction next month even as he stressed that “we will have to wait for the bills from suppliers and other factors this May, including dispatch levels and the movement of the peso against the dollar.”

Meralco officials said they are closely watching the supply situation as consumption spikes during the summer months.

For example, April 21 saw a usage peak of 9,831 megawatts, higher than the 9,726 megawatts recorded on May 3 last year.

“We already know peak demand may rise this May,” Fernandez said.

At the moment, he said, Meralco is on “white alert and hoping it will stay that way for the rest of the month.”

A white alert means the power situation is normal. A yellow alert means contingency reserves are below minimum levels while a red alert indicates severe power deficiency.

Should the supply-demand situation in Luzon remain stable, Meralco said it may cut rates again in June.