Meralco files for lower rates

Business World Online
Posted on March 31, 2014 12:03:20 AM
By Claire-Ann C. Feliciano, Reporter

MANILA Electric Co. (Meralco) customers may see a reduction in the distribution charge component of their power bills starting July, with the firm seeking to cut the rate following an annual revenue requirement review.

Meralco, in a March 28 petition that was published yesterday, asked for the Energy Regulatory Commission’s (ERC) approval to implement a maximum average price (MAP) of P1.5562 per kilowatt-hour (kWh) for the 2015 regulatory year and distribution rates adjustments across all customer classes.

“The rates subject of the ... application are lower than Meralco’s MAP for RY 2014 of P1.6474/kWh,” the petition noted.

“Thus, to allow its customers to immediately enjoy the lower distribution rates, it is necessary that a provisional authority be immediately issued authorizing Meralco to implement the proposed rates, pending hearing on the merit of the ... application.”

The MAP is based on the annual revenue requirement of a distribution utility. It also takes into account performance-based incentives.

“Said MAP shall then be allocated by the distribution utility in setting the rate schedule for the distribution, supply and metering charges for each customer class or segment,” the petition explained.

The proposed MAP covers a P1.1398/kWh distribution charge, P0.2537/kWh supply charge and a P0.1627/kWh metering charge.

Larry S. Fernandez, Meralco’s head for utility economics, said the rates, if approved, would be implemented starting July of this year. He added that the different customer classes would see varying distribution rate reductions depending on their consumption.

With the proposed MAP, residential customers consuming 200 kWh and below will pay a distribution charge of P1.1282/kWh, while those using 201-300 kWh will pay P1.4855/kWh. Those consuming 301-400 kWh, meanwhile, will pay P1.8227/kWh and those at 401 kWh and above will be charged P2.4100/kWh.

Supply and metering charges for all residential customers will be uniform at P0.5730/kWh and P0.3840/kWh, respectively.

Meralco’s distribution rate -- which is adjusted every regulatory year -- accounts for 17.5% of a consumer’s bill. The generation charge, which is revised monthly, accounts for the bulk at 57%.

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 in BusinessWorld. source