The combined effect of the reduction in transmission charges and other rate components will pull down the overall electricity billing of the customers of Manila Electric Company (Meralco) this month by P0.12 per kilowatt hour.

This is seen as an ‘anger-easing development’ from the brownouts which pestered many consumers in the utility firm’s franchise area as well as other parts of Luzon on Wednesday.
The company, in a statement, has noted that “a typical household using 200 kWh will experience a reduction of P24 in his/her electric bill.”

Meralco further explained that the aggregate cost reduction of P0.20 per kWh in transmission charge as well as those on system loss charge, lifeline rate subsidy and value added tax (VAT) had somehow offset the calculated P0.08 per kWh increase in the generation charge.
“The transmission charge registered the biggest decrease at around P0.12 per kWh, mainly due to lower ancillary service charges from the National Grid Corporation of the Philippines,” the utility firm said.

All these cost components move on a monthly basis; and it is being explained by Meralco what are the drivers for the adjustments. Generally, the generation charge account for largest chunk of the costs being passed on to end-consumers.

For this month, Meralco has emphasized that the generation charge will go up to P5.47 per kWh from the previous billing month’s P5.39 per kWh.

“With the onset of summer, demand for power climbed to record levels in the April supply month,” the power utility firm has reiterated.

Last month, it was noted that peak demand for the Luzon grid reached record level of 8, 221 megawatts from the past year’s 7,898MW.

Meralco indicated that because of the sudden spike in demand, it was also prompted to increase the level of its supply procurement from the Wholesale Electricity Spot Market. Typically, prices in the market shoot up during summer months due to supply tightening.

In Meralco’s service area, in particular, it stated that demand posted an uptick to 5,829MW vis-à-vis last year’s 5,633MW.

For its power supply agreements (PSAs), the generation cost had also been higher by P0.10 per kWh to P4.34 from P4.24 per kWh previously.

Its electricity supply sourcing had been highest for its PSAs with 51-percent share; while contracted independent power producers (IPPs) contributed 37-percent and the balance of 12-percent from the spot market. (MMV)


Velasco, M. M. (2013 May 10). Meralco charges down by P0.12/Kwh this month; transmission fees lower. Manila Bulletin.http://www.mb.com.ph/article.php?aid=11352&sid=2&subid=77


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