Manila Electric Co (Meralco) has announced a decrease in electricity rates for January 2018.

The decrease, amounting to P0.5260 per kilowatt hour (kWh) for a typical household, is seen to bring down the overall rate from last month's P9.2487 per kWh to P8.7227 per kWh.

The rate decrease this month amounts to close to a P105 reduction in the total bill of a typical residential customer consuming 200 kWh, the power distributor said.

The lower January rate is mainly due to a P0.5277 per kWh reduction in the generation charge. This is the second consecutive month of a decrease in overall electricity rates, totaling a reduction of PhP0.9045 per kWh in the two-month span, Meralco said.

LOWER GENERATION CHARGE

According to Meralco, generation charge decreased from P4.6045 per kWh in December to P4.0768 per kWh this January primarily due to lower Power Supply Agreements (PSA) and Wholesale Electricity Spot Market (WESM) charges.

Charges from PSAs registered a decrease of P0.9810 per kWh, brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission (ERC).

The reduction in capacity fees of generator companies represents savings immediately passed on to consumers by way of lower electricity rates. The capacity fees from PSAs will return to normal levels after the downward adjustment this month. PSAs provided 40 percent of Meralco's total energy requirement.

Charges from the WESM also decreased by P1.6943 per kWh due to lower spot prices resulting from a reduction in power demand in the Luzon grid. The share of WESM purchases to Meralco's total requirement this month was 19 percent.

Charges from the Independent Power Producers (IPPs) meanwhile increased by P0.3808 per kWh due to lower average plant dispatch. The share of IPP purchases to Meralco’s total requirement this month was at 41 percent, Meralco said.

OTHER CHARGES OFFSET TRANSMISSION CHARGE HIKE

Transmission charge of residential customers increased by PhP0.1168 per kWh due to higher NGCP ancillary service charges, but this was offset as taxes and other charges went down by PhP0.1151 per kWh this month.

Meralco's distribution, supply, and metering charges, meanwhile, remained unchanged for 30 months, after these registered reductions in July 2015.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FIT-All are collected by government.

ENERGY EFFICIENCY TIPS

As summer approaches, Meralco once again encouraged its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy.

Simple tips include unplugging appliances when not in use to avoid "phantom load."

Using an air conditioner at mid-setting or at 25 degrees Celsius for maximum efficiency can also help lower power costs.

Using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously using just one switch can be useful as well, the power distributor said.

Another tip was to maximize natural light during daytime, and to keep appliances well-maintained to ensure optimal performance.

For more helpful tips, customers may visit Meralco's website or its social media accounts -- on Twitter, and on Facebook.

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