Meralco may seek 30¢ rate hike this year

The Manila Electric Co. (Meralco) may seek a rate increase of 30 centavos per kilowatthour (kwH) this year following a slowdown in its profit performance last year.

Meralco vice president Rodolfo N. Quetua, said they are expecting a five-percent return on-rate-base (RORB) for 1999. In 1998, Meralco recorded a 7.5-percent RORB.

Quetua said the request for a rate hike is hinged on the coming onstream of the Sta. Rita gas-fired power plant. The Batangas-based plant is an independent power producer (IPP) of First Gas Power (FGPC), which in turn is a subsidiary of Lopez-controlled First Philippine Holdings Corp. (FPHC).

Quetua said the rate hike may be P0.30 per kilowatthour (kwH) spread out in two phases -- P0.15 in April and another P0.15 in June.

According to Quetua, the rate hike may not necessarily reflect in the monthly bills of the consumers. He said they have several options in dealing with the rate hike.

Meralco president Manuel M. Lopez said in earlier inteviews that the company is working out a scheme wherein the consumers will not actually experience any change in their bill despite an application for a rate increase.

Lopez said that with the entry of the Sta. Rita and the Quezon power plants this year, they expect to generate savings as it projects lower rates charged on them.

The full operation of the Quezon Power Corp. will result in approximately P0.07 per kilowatthour (kwH) savings and the Sta. Rita gas-fired plant will redound to a P0.16 per kwH savings.

The Quezon and Sta. Rita power plants will be generating up to 1,500 megawatts (MW) of energy when fully operational this year. That will result in a reduction of purchased energy from the National Power Corp. (Napocor).

The P0.23 per kwH savings will roughly be the equivalent of the rate hike application with ERB, Lopez explained.

The revenues to be realized from the rate hike and the savings from the power purchases from its IPPs will be utilized to increase its RORB to eight percent, which is the acceptable level of its domestic and foreign creditors.

"We have to reach an eight-percent RORB to assure the companies viability to its creditors," Lopez had said in earlier interviews.