RESIDENTIAL HOUSEHOLDS in areas served by Manila Electric Co. (Meralco) will see lower electricity bills in June as the power distributor cut power rates amid a drop in generation charges.

In a statement on Wednesday, Meralco said that electricity rates will fall by P0.1076 per kilowatt-hour (kWh) in June to P12.1552 per kWh from P12.2628 per kWh in May.

Households consuming 200 kWh will see their monthly electricity bills go down by around P22. Those consuming 300 kWh, 400 kWh, and 500 kWh will see a reduction of P32, P43, and P54 respectively.

Meralco attributed the overall rate reduction to the lower generation charge, which dropped by P0.1099 per kWh to P7.3552 per kWh.

“The reason for this reduction is the decrease in the charges from our suppliers and the Wholesale Electricity Spot Market (WESM),” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said at a briefing.

Charges from power supply agreements (PSA) and independent power producers (IPP) slipped by P0.3699 and P0.1034 per kWh, respectively, due to lower fuel costs and higher average dispatch.

WESM charges likewise declined by P0.6342 per kWh amid an improved supply situation in the Luzon grid for the May supply.

PSAs, IPPs, and WESM accounted for 48%, 33%, and 18%, respectively, of the power distributor’s total energy requirement for the period.

Despite the continued decline of prices in the WESM, rates during the rainy season are still uncertain due to power plants that may undergo maintenance, according to Lawrence S. Fernandez, Meralco vice-president and head of utility economics.

“We are expecting the demand to go down from the peaks that we experienced during summer because it’s already the rainy season. It’s not as warm anymore, so electricity usage will decrease. That will tend to push down power prices,” Mr. Fernandez said in mixed English and Filipino.

“However, on the supply side, since power plants were not allowed to go on maintenance during the summer months… now that it’s the rainy season, this is the time they can do their regular scheduled maintenance. So, in that case, supply will go down because they’re on outage, and that will tend to push prices up,” he added.

On the other hand, transmission charges increased by P0.0214 per kWh due to higher ancillary service charges from the National Grid Corp. of the Philippines’  ancillary service procurement agreements and the reserve market.

Other charges, including taxes, went down by P0.0191 per kWh.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government,” the company said.

Meralco’s distribution charge remained unchanged since the P0.0360 per kWh in August 2022.

The company said that the implementation of the distribution-related refund of P0.2024 per kWh for residential customers is still ongoing.

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 an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera