Romeo Braceros Jr.

Primarily due to the downward trend in the generation charge portion of the unbundled electric bills, Meralco customers' electric bills will have a very slight drop of P0.0106 per kilowatt hour (kWh) this month.

According to the power company, the overall effective rate for this billing cycle will be P10.8895 per kWh instead of P10.9001 per kWh last month.

The comparable rate reduction would be at least P2.00 for typical home end users who consume 200 kWh.

This is due to the generation charge's reduction by P0.2137 per kWh, which now stands at P6.9154 from the January billing of P7.1291 per kWh and makes up the largest portion of the entire pass-on price.

The collection of feed-in-tariff allowance (FIT-All) as a subsidy to eligible renewable energy (RE) projects remains stopped, as previously ordered by the Energy Regulatory Commission. In contrast, the transmission price and taxes saw a slight net rise of P0.0108 per kWh.

Meralco said in particular that the Wholesale Electricity Spot Market's (WESM) lower costs and the lower costs invoiced by its contractual independent power producers (IPPs), which in turn offered cost offset, were the key factors that prompted the decline in the production price.

“WESM charges decreased by P3.7370 per kWh as the supply situation in the Luzon grid improved with less generation capacity on the outage, lower demand, and absence of yellow alerts,” Meralco stressed.

The secondary price cap, which is generally the market signal for any increase in power prices, was not activated, according to the statement, "marking the first time since October 2021 that the cap was not applied during a supplied month. “

Due to the ongoing shakiness of its legally impeded power supply agreements (PSAs) with SMC Global Power Holdings Corporation of the San Miguel group, which cover roughly 1,000 megawatts of contracted capacity, Meralco's supply sourcing from the spot market had been at a significantly high volume of 16 percent last month.

Meralco reported a P0.2950 per kWh decrease in its procurement with IPPs, principally as a result of "reduced natural gas costs after the quarterly repricing of Malampaya gas that mirrored the recent trend in  international crude oil prices.”

With the peso ending January at its best level if measured from May last year, Meralco noted, "the continuous appreciation of the peso, which affected 95 percent of IPP expenditures that are dollar-denominated, also contributed to the drop."

Due to decreased average plant dispatch and Meralco's emergency supply sourcing from the Aboitiz group's Dinginin plant to partially make up for the interrupted supply deliveries from the SMC-controlled plants, the PSA costs were reported to have increased by a considerable P0.7970 per kWh.

Compared to the capacity used by the contracted power providers, the PSA-procured supply made up 47% of the total last month.