Meralco To Lower Electricity Rates In May 2018

This month this year is possible the hottest we’ve experienced over the last couple of months. This is why most households account to more electricity use for electric fans, air conditioners, and air coolers. By having them on most of the time, we just might be in shock with our electricity bills. This is why Manila Electric Co (Meralco) announced a decrease in overall electricity rates for May 2018. This will be amounting to Php0.5436 per kilowatt-hour for a typical household. Would these lower electricity rates help us overall?

Mainly, the lower rate this May is due to the Php0.4212 per kWh decrease in the generation charge.

The adjustment this month brings the overall rate to Php10.0041 per kWh from April’s Php10.5477 per kWh. In a larger picture, this decrease is equivalent to a spring down of around Php109.00 in the bill of a residential customer consuming 200 kWh.

Last month April, the kWh was Php5.4735; the generation charge for this month will be Php5.0523 per kWh. Substantially, this would lower electricity rates in a bigger picture.

Charges from the Wholesale Electricity Spot Market (WESM) decreased by Php1.0139 per kWh, despite higher demand for power in the Luzon Grid. Why? This is because of the recovery of shut down power plants which were suspended due to repair and technical concerns.

The share of WESM purchases to Meralco’s total requirement this month was 22%.

On the other hand, the power cost from Independent Power Producers (IPPs) also went down; theirs went down by Php0.5920 per kWh. The reason for this is due to Quezon Power’s return to normal operations from its scheduled maintenance.

In simpler terms, power plants are recovering and are being put to operations again. The reason why our electric bills are a bit higher than the usual these past few months was because of the repair and adjustments over these plants and power supplies.

The improvement in average plant dispatch more than offset the upward adjustment due to higher Malampaya natural gas prices resulting from the quarterly repricing that reflect recent movement of crude oil prices in the world market.

These IPPs gave 45% of Meralco’s total energy requirement

Meanwhile, purchases from Power Supply Agreements (PSAs) increased by Php0.2096 per kWh due to maintenance outages of Pagbilao Unit 1 and Ilijan Unit 1, and the quarterly repricing of Malampaya natural gas. However, this will return to normal or even lower when these plants are returned to operations.

The share of PSA purchases to Meralco’s total requirement this month was 33%.

Lower electricity costs this month would truly be beneficial. As our weather is becoming hotter and hotter, the need for a comfortable space is dominant. Hopefully, plants would remain stable and if it can, be better for us to have lower bills with higher usage.

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