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Higher electricity rates seen with Meralco pleas

By Riza Recio

11/21/2007

Electric distributor Manila Electric Co. (Meralco) has 10 pending petitions with the Energy Regulatory Commission (ERC) to adjust power rates which Raul Concepcion, chairman of the Consumer and Oil Price Watch (COPW), claims would result in P9.20 per kilowatt-hour (kWh) hike in electricity rates.

“Meralco says it will reduce residential rates by 34 centavos per kWh beginning November. That’s the good news. The bad news is that Meralco has a pending rate increase of P9.20 per kwh,” Concepcion said.

Meralco vice president for Corporate Communication Elpi Cuna, however, disputed Concepcion’s claims saying Meralco has no petition for a P9.20 per kWh rate increase in generation charge due to under-recoveries from September 2006 to July 2007.

Although Meralco refused to give the exact amount on its 10 pending rate increase with the ERC, it maintained that a decision by the regulatory body still has to be issued. Only when the decision is made can Meralco confirm a rate adjustment, Cuna said.

Cuna said Meralco continues to offer electricity users various rate options such as the Customer Choice Program and the Time-Of-Use (TOU) billing to avail of lower cost electricity.

Early this month, Meralco said its electricity charges went down by 34.25 centavos per kWh due to the lower generation and system loss charges for November.

Meralco noted that generation charge alone dropped by 29.98 centavos per kWh to P4.3525 per kWh for this month from P4.6523 per kwh in October due largely to the lower power rate sourced from the National Power Corp.

Systems loss charges for all customer classes went down, with residential customers obtaining a P0.0427 per kWh reduction, bringing the total discounts to P0.3425 per kWh.

Concepcion said the P9.20 per kWh increase represents Meralco’s cumulative under recoveries from September 2006 to July 2007 after the Supreme Court released a ruling in August last year that prevented the automatic pass on of cost adjustments.

The automatic pass on adjustments were resumed after Congress amended the Electric Power Industry Reform Act (Epira) implementing rules and regulations.

Concepcion said that Meralco’s under recoveries for the first six months alone already reached to P6.1714 per kWh.