THE Manila Electric Company (Meralco) announced on Monday a P0.7961 per kWh decrease in the December electricity rate, bringing the overall rate for a typical household to P11.2584 per kWh this month from P12.0545 in November.

For residential customers consuming 200 kWh, the adjustment is equivalent to a P159 decrease in their total electricity bill.

This month’s reduction was able to offset the increases implemented in the past two months.

Generation charge for December went down by P0.6606 to P6.5332 from P7.1938 per kWh last month due to lower charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).

WESM charges decreased by P2.7624 per kWh with the improved supply situation in the Luzon grid as demand went down by around 421 MW and average plant capacity on outage decreased by about 679 MW.

Lower spot market prices avoided the imposition of the secondary price cap in November.

Charges from IPPs went down by P0.4731 per kWh due to First Gas plants’ reduced use of more expensive liquid fuel and lower international coal prices.

Also contributing to this was the peso appreciation, which affected around 97% of IPP costs that were dollar-denominated.

On the other hand, there was a slight upward adjustment of P0.0805 per kWh in charges from Power Supply Agreements (PSA), owing it to lower average PSA dispatch.

Transmission charge, taxes and other charges also registered a net reduction of P0.1355 per kWh.

The collection of the Feed-In Tariff Allowance (FIT-All), at the rate of P0.0364 per kWh remains suspended as directed by the Energy Regulatory Commission.

Meralco pays pass-through charges for generation and transmission to the power suppliers and the grid operator, respectively, while taxes, universal charges and FIT-All are all remitted to the government.

Meralco’s distribution charge, meanwhile, has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022.