Meralco consumers enjoy lower power rates in May

Meralco consumers enjoy lower power rates in May

·        Earlier this month, Meralco announced that the rate for its residential customers in May would go down by 41-centavos per kWh, thereby bringing it down to Php 8.44 per kWh.

·         For a typical household consuming 200 kWh, this translates to a reduction of around Php 82.00 in their electricity bill.

·        This month’s overall rate is lower by Php 1.54 per kWh compared to May 2015’s Php 9.98 per kWh. It is also the lowest since January 2010, or over a period of six years.

·        The decrease in the overall rates was primarily due to the generation charge, which decreased by PhP0.21 per kWh from last month.May’s generation charge is the lowest since October 2004.

·         Transmission charge likewise registered a decrease of PhP0.10 per kWh due to the reduction in NGCP’s ancillary charges and slight decrease in Power Delivery Service (PDS) charge.

·         Taxes and Other Charges also decreased by PhP0.10 per kWh following the reduction in generation and transmission charges.

·        Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 10 months, after they registered a reduction in July 2015.

Meralco does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines (NGCP).

 

Where Your Money Goes

What you pay in your bill also goes to these other components of the electricity supply chain.

GENERATION CHARGE is the largest component of the bill. It comprises the total of all costs charged by the different generation companies that provide Meralco with power supply. These include San Miguel Corporation, Aboitiz Power, DMCI, First Gen, AES, and EGCO. In special cases, this may include charges from the Wholesale Electricity Spot Market (WESM).

TRANSMISSION CHARGE goes to NGCP. Of course, there are also government taxes and other charges warranted by government regulators to ensure the industry’s viability. 

Instead of each of these entities delivering bills to your doors and collecting payment, Meralco consolidates all charges in one electric bill, before sending it to you. Then, Meralco collects payment and pays the other companies and the government in behalf of its consumers.

DISTRIBUTION CHARGE is the only amount Meralco receives for its services. Distribution charge is not as unpredictable as other charges because it is regulated by the Energy Regulatory Commission (ERC). In fact, the distribution charge decreased last 2014, became even lower last 2015, and has not changed since then.