January power rate hike set at P0.65/kWh

Posted on March 20, 2014 11:26:10 PM

A PENDING power rate hike Manila Electric Co. (Meralco) wants to retroactively charge for January will be substantially lower, the utility yesterday announced.

REDUCED CHARGES from suppliers have led to a reduction in a power rate hike that Manila Electric Co. is seeking. -- BW File Photo

From P5.33 per kilowatt-hour (kWh), Meralco said it would now ask the Energy Regulatory Commission (ERC) to approve a P0.65/kWh increase based on a recalculated generation charge.


An initial petition to recover deferred costs, the firm explained, was based on a January generation charge of P10.23/kWh, of which only P5.67/kWh was billed consumers given a ERC-set cap.


With the adjusted generation charge having been pegged at P6.12/kWh, the difference still to be billed consumers has fallen to P0.45/kWh from P4.56/kWh, Meralco said.

Adding on other charges such as taxes, the overall rate hike should be P0.65/kWh instead of P5.33/kWh, the firm added.

Meralco said the recalculated generation charge was based on revised Philippine Electricity Market Corp. (PEMC) billings for power sourced from the Wholesale Electricity Spot Market (WESM), along with "the recomputed costs for replacement power for Sual and Masinloc", for the December supply month.

"Effective WESM rate for the said supply month went down from P36.08/kWh to P8.33/kWh after the PEMC recalculation," the firm said.

The generation charge -- the cost of power sold to a distributor -- accounts for around 57% of a Meralco consumer’s bill. The rest comprises the distribution charge (17.6%), transmission charge (9%), system loss charge (5%), and taxes and other charges (11.5%).

Meralco said it would "draw guidance" from the ERC with regard to billing the revised January charges. Its initial petition called for a six-month recovery period and the firm yesterday said it would propose a "recovery scheme based on what will be in the customers’ best interest."

High WESM prices have been blamed for the P5.33/kWh increase and an earlier P4.15/kWh rate hike being reviewed by the Supreme Court that Meralco wants to charge consumers in stages.

Meralco said PEMC had not billed it for the November supply month given the high court case.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake inBusinessWorld.  source