This is equivalent to a reduction of around P15 in the total bill of residential customers consuming 200 kWh.

Generation charge in January decreased by P0.1081 per kWh to P5.4262 per kWh from last month’s P5.5343 per kWh, on the back of lower costs from Power Supply Agreements (PSAs) and Independent Power Producers (IPPs) that more than offset the higher charges from the Wholesale Electricity Spot Market (WESM).

PSA and IPP rates registered reductions of P0.4375 and P0.0543 per kWh, respectively. The higher share of excess energy deliveries of AC Energy plants and lower coal prices contributed to the reductions.

PSAs and IPPs provided 46.5 percent and 41.3 percent of Meralco’s energy requirement, respectively.

WESM charges, on the other hand, increased by P0.8511 per kWh brought about by higher average capacity on outage in the Luzon grid. Forced and planned outages of major power plants repeatedly triggered the secondary price cap, which was imposed on 16.96 percent of total trading intervals in the December supply month versus only 0.22 percent of the time in November.

Damages from Typhoon Odette and the continued Malampaya gas supply restriction also contributed to the grid’s tight supply condition. Meralco