Residential electricity consumers in Iloilo City will enjoy lower cost as More Electric and Power Corporation (MORE Power) announced a significant reduction in the average residential rate for the billing months of May to June 2023.
The new rate stands at P12.2990 per kilowatt-hour (kWh), reflecting a noteworthy decrease of P0.9522 per kWh from the previous month’s rate of P13.2511 per kWh.
MORE Power explained in a statement that one of the primary factors contributing to this decrease is the lower generation cost.
For this month, the generation cost has decreased to P7.1182 per kWh, marking a reduction of P0.5362 per kWh.
The addition of Energy Development Corp’s geothermal power in the power supply mix of the distribution utility also has had a positive impact.
Geothermal power, a renewable energy source, is known for its cost-effectiveness and environmental benefits.
Moreover, the lower exposure to high spot market prices in the Wholesale Electricity Spot Market has played a significant role in reducing generation costs.
Lastly, a decrease in coal prices has also contributed to this decline.
Furthermore, the entry of a renewable energy supplier into the supply mix has yielded an additional advantage by reducing the value-added tax (VAT) on generation.
As a result, there has been a reduction of P0.1613 per kWh in VAT charges.
Notably, the transmission charge has also decreased, further benefiting consumers.
The charge has dropped by P0.1831 per kWh, from P0.9057 per kWh in the previous month to P0.7226 per kWh this month.
This decrease is primarily attributed to the lower ancillary service charge and increased kWh billing determinant. The peak demand for this period has been recorded at 127.24 MW.
The positive trend of decreasing charges extends to the system loss charge as well. The system loss for the previous month was 7.00%, while the 12-month average system loss stands at 6.49%.
This reduction in system loss aligns with the decrease in generation and transmission charges, offering additional relief to consumers.