Manila BulletinBy Myrna M. VelascoPublished: April 3, 2013
Power utility giant Manila Electric Company (Meralco) has filed for an average P0.02 per kilowatt-hour adjustment in its distribution tariff to P1.6510 per kilowatt-hour (kWh) to be enforced for regulatory year 2014.
This will form part of its yearly updating of its five-year rolling maximum average price (MAP), which is a prescription under performance-based rate-setting (PBR) methodology as prescribed by the Energy Regulatory Commission.
The proposed adjusted charges will comprise of: P1.1986 per kWh distribution charge; P0.2757 per kWh supply charge; and P0.1767 per kWh metering charge.
Typically, the adjustment period in its distribution tariff begins June 26-July 25 billing cycle of every year or upon approval by the industry regulator. The PBR sets the rates of regulated utilities over a five-year period, but with mandatory filing for adjustments annually.
While the company’s average MAP for 2013 was initially set at P1.5755 per kWh, this was eventually pulled up to average P1.6303 per kWh due to indexation and other adjustment factors. Hence, the resulting increase for this regulatory year will just be P0.02 per kWh, according to officials of the Meralco utility economics division.
“The MAP 2014 of P1.6510 per kWh carries a performance incentive factor of P0.0387 per kWh which accounts for the performance of Meralco on its PIS (performance incentive scheme) for calendar year 2012,” the company has noted in its petition.
The utility firm added that a correction factor of negative P0.0574 per kWh, which accounts for under-recoveries, had also been factored in. This entails “plowback of 50-percent of net income derived from related business undertakings, and the difference between actual and forecasted income from the sale of disposed assets during calendar year 2012,” the company has explained further.
“The MAP 2014 will account for around 18-percent of the average total charges to applicant’s customers as of February 2013 billing month,” Meralco has emphasized.
The three sub-components in the distribution charge are the ones that flow directly into Meralco’s coffers; while the rest, including generation, transmission charges as well as taxes and subsidies are pass-through costs which are in turn remitted to power suppliers and the National Grid Corporation of the Philippines (NGCP) as well as to the government.
Meralco is already at its third regulatory period since the ERC instituted the PBR scheme as an alternative tariff-setting scheme for regulated power utilities. source
This will form part of its yearly updating of its five-year rolling maximum average price (MAP), which is a prescription under performance-based rate-setting (PBR) methodology as prescribed by the Energy Regulatory Commission.
The proposed adjusted charges will comprise of: P1.1986 per kWh distribution charge; P0.2757 per kWh supply charge; and P0.1767 per kWh metering charge.
Typically, the adjustment period in its distribution tariff begins June 26-July 25 billing cycle of every year or upon approval by the industry regulator. The PBR sets the rates of regulated utilities over a five-year period, but with mandatory filing for adjustments annually.
While the company’s average MAP for 2013 was initially set at P1.5755 per kWh, this was eventually pulled up to average P1.6303 per kWh due to indexation and other adjustment factors. Hence, the resulting increase for this regulatory year will just be P0.02 per kWh, according to officials of the Meralco utility economics division.
“The MAP 2014 of P1.6510 per kWh carries a performance incentive factor of P0.0387 per kWh which accounts for the performance of Meralco on its PIS (performance incentive scheme) for calendar year 2012,” the company has noted in its petition.
The utility firm added that a correction factor of negative P0.0574 per kWh, which accounts for under-recoveries, had also been factored in. This entails “plowback of 50-percent of net income derived from related business undertakings, and the difference between actual and forecasted income from the sale of disposed assets during calendar year 2012,” the company has explained further.
“The MAP 2014 will account for around 18-percent of the average total charges to applicant’s customers as of February 2013 billing month,” Meralco has emphasized.
The three sub-components in the distribution charge are the ones that flow directly into Meralco’s coffers; while the rest, including generation, transmission charges as well as taxes and subsidies are pass-through costs which are in turn remitted to power suppliers and the National Grid Corporation of the Philippines (NGCP) as well as to the government.
Meralco is already at its third regulatory period since the ERC instituted the PBR scheme as an alternative tariff-setting scheme for regulated power utilities. source
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