Meralco rates to go down in June billing

Published June 2, 2017, 12:05 AM By Myrna M. Velasco

http://business.mb.com.ph/2017/06/02/meralco-rates-to-go-down-in-june-billing/

On three-tiered impact from a mandated refund, lower spot prices and higher dispatch of power plants, customers of Manila Electric Company (Meralco) will be experiencing substantial financial relief in their electric bills this June.

The cost-reducing factors will more than offset the P0.0590 per kilowatt hour (kWh) addition in the feed-in-tariff allowance (FIT-All) that shall also be reflected in the bills this month, based on the mandate of the Energy Regulatory Commission.

Meralco spokesperson Joe Zaldarriaga said “we may see a possible decrease in the basic generation charge as indication points to lower WESM (Wholesale Electricity Spot Market) prices including higher plant dispatch.”

He noted there would be further price softening because Meralco had likewise been done passing on the P0.2211 per kWh incremental fuel cost of its contracted independent power producers (IPPs) that accrued during this year’s Malampaya shutdown.

It will also be on this billing month that the P0.7541 per kWh refund on the over-recoveries – that Meralco had petitioned for – will be reflected in the bills.

That will be for an aggregate amount of P6.9 billion – with pass-on duration of three months or until August this year.

According to Meralco First vice president Ivanna G. dela Peña, the company will adhere to the ERC refund order, albeit, the company is now separately batting for rate recovery of its P1.89 billion worth of real property tax (RPT) payments.

In the filing with the ERC, the utility firm lumped RPT payments on its cost recoveries – and that could have brought down the overall refund amount – but such had not been approved by the industry regulator.

Reeling from that, Meralco said it opted to seek separate cost pass-on of its RPT charges as regulatory edicts actually allow the recovery of these in the electric bills.

“Real property taxes are definitely recoverable cost and it was being recovered before in the distribution charges since that is part of the building blocks under ‘other taxes’, except for corporate income tax,” Dela Pena said.

She emphasized that in fact, the Philippine Electric Plant Owners Association (PEPOA), has a pending filing with the regulators anchoring it on previous Supreme Court decision that distribution utilities, including Meralco, “can recover these tax payments in our rates.”

The power utility firm executive added  “in our application, we have given all the necessary documents for the recovery of all real property taxes, including receipts…so that’s part of our application…and we’re going to present them during the hearing process.”