By Alena Mae S. Flores

Consumers will pay less for their electric consumption this month as Manila Electric Co. announced a reduction in its generation charge of P0.079 per kilowatt-hour.

Meralco said in a statement that the adjustment would bring its generation charge to P4.50 per kWh in January from P4.5793 per kWh in December.

?Very low prices in the wholesale electricity spot market and the use of banked gas by the First Gas plants last December were the main drivers for the reduction,? said Ivanna dela Pe?a, Meralco?s vice president for utility economics.

?The sharp decline in cost from these sources cushioned the upward adjustment in National Power Corp.?s generation rate adjustment mechanism and the incremental currency exchange rate adjustment ordered by the Energy Regulatory Commission last December and the collection of the P2.11-billion unbilled line congestion cost for July 2008 which was already paid to the Philippine Electricity Market Corp. on schedule last August 2008,? she said.

Meralco included a refund of P392 million in the generation- charge computation for January

?Low demand due to the Christmas holidays and the cold weather were factors responsible for the low prices in the Wholesale Electricity Spot Market in December,? Meralco said.

The natural gas plants of First Gas Power Corp. ran on 100-percent banked gas, against just 50 percent to 60 percent of fuel consumption in November.

?With the end of the Christmas holidays, prices in the WESM are expected to normalize this January while the natural gas plants are already using contracted gas quantities for 2009 whose prices are indexed to world oil prices in the past six months,? it said.