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Meralco sees easing power rates as rainy season starts

POWER RATES in areas served by Manila Electric Co. (Meralco) are likely to go down next month as the electricity distributor expects demand to decrease further in the coming months.

Lawrence S. Fernandez, Meralco vice-president and head of utility economics, expects declining rates “if everything else is the same, given that the rainy season has started.”

“We are seeing even in the daily spot market results that the power demand is decreasing in [the] Luzon grid, coming off their highs from May. We may expect that spot market prices will also become more moderate,” he said during a briefing on Friday.

On June 2, the state weather bureau declared the start of the rainy season in the Philippines.

Mr. Fernandez said if the market trend goes on, the power utility expects spot market prices to decline, which will likely translate into lower overall power rates.

“If the lower spot market prices trend continues, this will be reflected in the July generation charge but we’ll have to see other components like PSAs (power supply agreements) and IPPs (independent power producers) behave,” he said, adding that Meralco also needs to see how the foreign exchange moves.

For June, residential customers served by Meralco will see an increase in their monthly power bills after the completion of distribution-related refunds.

Households that consume 200 kilowatt-hours (kWh) of electricity will see an increase of P84 in their June electricity bills. Meanwhile, those consuming 300 kWh, 400 kWh, and 500 kWh will see an increase of P125, P167, and P209, respectively.

“These refunds benefited Meralco’s customers over the past two years as these helped temper increases in electricity bills at a time of financial distress and uncertainty for many,” Meralco Head of Regulatory Management Office Jose Ronald V. Valles said in a media release.

The power utility giant implemented four distribution rate true-up adjustments from March 2021 until May 2023 for a total of P48.3 billion. This translates to P1.80 per kWh refund for residential customers, Meralco said.

Joe R. Zaldarriaga, Meralco spokesperson and vice-president for corporate communications, said lower generation and transmission charges were able to temper this month’s power rates from increasing further.

The generation charge decreased by P0.42 per kWh to P7.25 per kWh this month from P7.67 kWh in May.

Charges from PSAs, which account for 50% of Meralco’s supply, fell by P0.59 per kWh to P6.53 per kWh.

Charges from the IPPs, however, decreased by P0.59 per kWh to P7.04 per kWh. IPPs account for 38% of Meralco’s total requirement.

However, charges from the wholesale electricity spot market (WESM) increased by P2.02 per kWh to P10.94 per kWh due to the tight power supply situation in the Luzon power grid. For the supply month, WESM accounts for 12% of Meralco’s energy share.

Separately, One Meralco Foundation has energized an off-grid public school on an island in Antique province’s Caluya town, allowing students to use digital learning materials.

In a media release on Sunday, Meralco said the foundation’s project involves a 1-kilowatt-peak solar photovoltaic system for the school, which is reachable after a four-hour boat ride from mainland Antique.

The solar facility will power equipment that will provide lighting and ventilation. Also, printers, laptops, and television sets can now be used by both teachers and students. Lim Elementary School’s 100 students are taught by seven teachers.

“Investing on improvements in the learning environment of our students will help further not just their respective individual growth but also contribute towards the development of their community,” said Jeffrey O. Tarayao, the foundation’s president.

“With electricity access, these students can explore a bigger world of knowledge with the help of multimedia equipment that they can now fully use,” he added.

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 interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

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