Meralco Brings Power Rate Relief In October 2024

The Manila Electric Company (Meralco) has announced a significant reduction in electricity rates for October 2024, much to the relief of consumers.

Meralco Vice President and Head of Corporate Communications, Joe R. Zaldarriaga, announced a P0.3587 per kWh decrease in electricity rates for October, bringing the overall rate down to P11.4295 per kWh. This reduction, driven by lower generation and transmission charges, will result in savings of approximately P72 for households consuming 200 kWh. | Photo: Meralco

The power rate has decreased by P0.3587 per kilowatt-hour (kWh), lowering the overall rate for a typical household to P11.4295 per kWh from the previous month's P11.7882 per kWh.

This translates to a decrease of around P72 for residential customers consuming 200 kWh, providing some financial relief amidst rising costs of living.

The primary factor behind the rate reduction is the P0.3059 per kWh decrease in generation charges.

This reduction is largely attributed to the lower costs from the Wholesale Electricity Spot Market (WESM), which saw a significant drop of P5.1001 per kWh. The lower WESM charges were a result of the completion of the deferred May 2024 costs, previously ordered by the Energy Regulatory Commission (ERC).

Additionally, the Luzon grid experienced an improved supply situation, with average demand and outages on the grid both dropping by 544 MW and 519 MW, respectively.

This improvement in supply helped mitigate the rise in other charges, such as those from First Gas plants Sta. Rita and San Lorenzo, where the ERC approved the pass-through of higher Malampaya fuel costs beginning this October under new Gas Sale and Purchase Agreements (GSPAs).

However, not all charges saw a decrease. The costs from Independent Power Producers (IPPs) increased by P1.8556 per kWh due to the new Malampaya gas prices and the amortization of cost differentials for the supply months of January to August 2024.

Meanwhile, Power Supply Agreements (PSAs) saw a slight increase of P0.1128 per kWh.

Despite these hikes, the overall reduction in WESM charges outweighed these increases, benefiting consumers.

In addition to the reduction in generation charges, Meralco customers will also benefit from lower transmission charges, which dropped by P0.0383 per kWh due to lower ancillary service costs.

Taxes and other charges also decreased slightly, by P0.0145 per kWh. Notably, Meralco’s distribution charge has remained unchanged since August 2022.