Meralco Customers to Enjoy Lower Electricity Bills Following Reduction in Generation Charge

Strategic Insights -

Meralco's power users in the franchise area will be receiving another reduction in their electricity bills due to a drop in the generation charge this month. The reduction is attributed to lower wet season rates of the National Power Corporation (Napocor) and the higher dispatch of the Independent Power Producers (IPP), resulting in a 16.34 centavos per kilowatt hour (kWh) decrease in the generation charge. Meralco's generation charge has been on a downward trend since May this year, with the August bill reflecting a cumulative 92-centavo reduction from the April 2009 rate of P5.02 per kwh.

Key Takeaways:

  • The reduction in generation charge results in a decrease of 16.34 centavos per kWh, with the August bill reflecting a cumulative 92-centavo reduction from the April 2009 rate.
  • Customers consuming 100 kWh will have their bills drop by as much as P17 (US$0.36), while customers using 200 kWh will have a reduction of P32.68 and those consuming 300 kWh will have P50 slashed in their bills for the month of August.
  • Meralco's external communications manager, Mr. Joe R. Zaldarriaga, stated that the generation charge this month is at its lowest level since November 2004.
  • The cost of generation is a pass-through charge which Meralco does not earn from, and the company has maintained that whatever savings they incur from the cost of power are passed on to customers in the form of lower electricity bills.
  • Meralco reported a net income of P3.2 billion in the first half of 2009 due to the implementation of the performance-based regulation scheme (PBR), which also allowed for a 19.2 percent increase in their first-quarter net income compared to 2008.

Statistics:

  • Customers consuming 100 kWh will see a reduction of P17 (US$0.36) in their electricity bills.
  • Customers using 200 kWh will have a reduction of P32.68.
  • Those consuming 300 kWh will have P50 slashed in their bills for the month of August.
  • The August bill reflects a cumulative 92-centavo reduction from the April 2009 rate of P5.02 per kwh.
  • The P4.10 per kwh generation charge is the lowest level since November 2004.
  • Meralco reported a net income of P3.2 billion in the first half of 2009.

Sources:

  • Manila Electric Company (Meralco) (PSE:MER)
  • Meralco Vice-President for Utility Economics Ivanna dela Pena
  • Meralco's external communications manager, Mr. Joe R. Zaldarriaga
  • National Power Corporation (Napocor)
  • Independent Power Producers (IPP)
  • Energy Regulatory Commission (ERC)