In a welcomed relief for consumers, the Manila Electric Company (Meralco) has lowered electricity rates this January by P0.2189 per kilowatt-hour (kWh). This means that typical households will now pay P11.7428 from the previous month’s P11.9617, helping families save on their bills.

For example, residential customers consuming 200 kWh can expect a decrease of approximately P44 in their total electricity bill this month. This reduction comes as a relief to many, contributing to household budgetary flexibility during an economically challenging time.

According to Meralco, this month’s electricity rates went down as a result of lower generation and transmission charges. This month’s generation charge, is now at P6.8368 per kWh, down by P0.1313 per kWh primarily due to lower charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).

WESM charges decreased by P0.8840 per kWh, and IPP costs saw a reduction of P0.1593 per kWh. This reflects an improved supply situation in the Luzon Grid, with a significant decrease in average peak demand by 471 MW and a reduction in capacity outages by 305 MW.

Meralco added the appreciation of the peso has also played a key role in lowering IPP charges, as approximately 97% of their costs are dollar-denominated. Additionally, reduced fuel costs and increased output from the First Gas-Sta. Rita plant further contributed to this positive shift.

Despite these reductions, there was a P0.5638 per kWh increase in charges from Power Supply Agreements (PSAs) due to lower plant dispatch.

Meanwhile, transmission and other charges experienced a net reduction of P0.0876 per kWh.

According to Meralco, pass-through charges for generation and transmission are paid to power suppliers and grid operators, respectively, while taxes, universal charges, and the Feed-in Tariff Allowance (FIT-All) are remitted to the government.

On the distribution side, Meralco’s charges have remained unchanged since a reduction of P0.0360 per kWh for typical residential customers in August 2022.

Despite lower electricity rates this month, Meralco advises customers to continue saving energy. Practical tips include unplugging appliances when not in use, ironing multiple items at once, avoiding overfilling refrigerators, regularly cleaning air conditioner filters, and using LED lighting.

“While electricity rates decreased this month, we would like to remind our customers to continue practicing energy efficiency, especially with the dry season fast approaching,” said Joe R. Zaldarriaga, Vice President and Head of Corporate Communications.

Zaldarriaga also encouraged customers to use the Meralco Appliance Calculator,  a tool they can use to gain better insight into their electricity consumption, ultimately enabling them to make informed decisions that can further reduce their bills.

Comment below for more energy-saving tips.