219 Meralco Customers To Benefit From New Peak/Off-Peak Rates

Manila Bulletin

By Myrna M. Velasco

January 30, 2013, 5:16pm

About 219 large customers of Manila Electric Company (Meralco) are expected to benefit from cost savings with its provisionally approved peak/off-peak rate (POP) program.

Based on data analysis it furnished the Energy Regulatory Commission (ERC), at least 75 customers which were previously granted discounted rate under the Customer Choice Program (CCP) and another 144 end-users from the Ecozone Rate Program (ERP) will reap overall cost reduction even without them shifting their consumption from peak to off-peak hours.

The discounted tariff for big electricity end-users were previously given to 86 CCP customers and 352 ERP-qualified end-users as part of the government’s resolve to ease the industries hefty burden on electricity costs. These availees have 43.8-percent share in the country’s manufacturing sector and their exports contribute around $19.6 billion in revenues.

The regulator noted that a timely approval of the POP-applied rates of Meralco is necessary to prevent a scenario wherein industrial users would be prompted to relocate their manufacturing facilities in other countries. The new rates will be effective this January billing.

It can be gleaned from the ERC decision that the new peak rates are higher than the previously-approved tariffs, but the off-peak rates have been remarkably reduced.

For the months January to June, the approved peak rate is at P7.4854 per kilowatt hour (kWh); and it is at P7.2779 per kWh for July to December. Notably, these are higher compared to the previous time-of-use (TOU) rates at P6.4852 per kWh and P6.1053 per kWh, respectively, for the same periods.

The off-peak rate for January to June as well as July-December is at P3.5461 per kWh, which is also higher than the previous off-peak TOU rate of P3.0925 per kWh.

The load shifts to the cheaper off-peak rates are seen beneficial to industries like cement, steel, glass, textile, electronics, semiconductors, plastic, business process outsourcing (BPO), telecommunications and water utilities, among others.

The ERC ruling has noted that there is a “wider price difference” between peak and off-peak in the new POP rates.

It stressed that the newly approved tariffs will not only encourage end-users to shift to the lower cost off-peak hours, but it will also benefit the distribution utilities to shave on peak loads, hence, helping hem improve their load factors.

“Meralco designed its revised TOU retail rates in such a way that it will have a wider spread between peak and off-peak rates so as to encourage customers to respond to the pricing signal and consume electricity during off-peak periods,” the regulator said.  (MMV)   source