POWER distributor Manila Electric Co. (Meralco) expects a reduction in the cost of power procured from suppliers for the January billing cycle due to lower electricity prices at the spot market, a company official said on Thursday.
“Indications show a possible decrease in the generation charge in our customers’ bills this January,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in a Viber message.
The generation charge usually makes up more than 50% of the monthly electricity bill.
Mr. Zaldarriaga attributed the potential reduction to the lower prices at the Wholesale Electricity Spot Market (WESM) due to an “improved supply situation in the Luzon grid as both average peak demand and average capacity on outage went down in the December supply month.”
Preliminary data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed that the average WESM price in Luzon declined by 23% to P3.26 per kilowatt-hour (kWh) amid higher power supply and lower demand.
IEMOP is the operator of the WESM, the trading floor where energy companies can buy power when their long-term contracted power supply is insufficient for customer needs.
“We expect the lower generation charge to lead to an overall rate reduction in this month’s electricity rates,” Mr. Zaldarriaga said.
The possible decline in power rates for January would be the first reduction this year and comes after two consecutive months of hikes.
In December, the overall Meralco rate climbed by P0.1048 per kWh to P11.9617 per kWh from P11.8569 per kWh in November, largely due to a higher generation charge.
The generation charge rose by P0.1839 per kWh, brought by the increased costs from the WESM and power supply agreements.
Meralco is the main power distributor for Metro Manila and nearby areas, covering 39 cities and 72 municipalities, delivering power to around eight million customers.
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 an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
