By Kris Crismundo

(PNA file photo)

MANILA – After three months of increasing power rates, the Manila Electric Company (Meralco) will finally slash electricity charges for December.

In a statement Monday, the distribution utility said power rates dropped by PHP0.7961 per kilowatt hour (kWh), bringing down electricity charges to PHP11.2584 per kWh from PHP12.0545 per kWh in November.

“This month’s reduction was able to more than offset the increases implemented in the past two months,” Meralco said.

The adjustment is equivalent to a decrease of around PHP159 in their monthly electricity bill for household customers consuming 200 kWh.

Meralco attributed the drop in electricity prices to lower generation charges, which went down by PHP0.6606 per kWh to PHP6.5332 per kWh in December from PHP7.1938 per kWh last month.

It said power sourced from the Wholesale Electricity Spot Market (WESM) was lower by PHP2.7624 per kWh due to a better supply situation in Luzon.

Charges from independent power producers (IPPs) also declined by PHP0.04731 per kWh mainly due to First Gas plants’ reduced use of more expensive liquid fuel and to the lower international coal prices, while peso appreciation also cut prices from IPPs as 97 percent of their costs were dollar denominated.

Power supply agreements (PSAs) charges, on the other hand, went up by PHP0.0805 due to lower average dispatch.

“WESM, IPPS, and PSAs accounted for 20 percent, 32 percent, and 48 percent, respectively, of Meralco’s total energy requirement for the period,” the distribution utility said.

Meanwhile, Meralco welcomed the study of the International Energy Consultants (IEC) that noted that Meralco’s power rates are fair and reasonable.

The IEC study showed that Meralco ranked 21st among 46 countries in terms of average electricity tariff for 2022. It also noted that Meralco’s average electricity tariff is 3 percent below the global average, and if the list excludes subsidized power distributors, Meralco’s charges will be 13 percent lower than the global average.

Neighboring countries like Thailand, Indonesia, Malaysia, South Korea, Taiwan and Vietnam subsidize their power rates by more than 50 percent.

“Considering that Luzon power market is unsubsidized, and the majority of the electricity is produced using imported fuel, Meralco appears to have done a very good job of minimizing tariff increases,” the IEC said. (PNA)