Meralco cuts rates by 50¢/kwh

It may only be temporary, but the P0.50-per-kilowatthour reduction in rates which the Manila Electric Co. implemented in its May-June billing cycle is a welcome relief to consumers pinched by the traditional back-to-school expenses which further strain already tight household budgets.

In fact, Meralco jumped the gun on the National Power Corp. on whom consumers are still waiting for the implementation of the mandated reduction in the purchased power cost adjustment of the state-owned utility firm.

The power rate cut stemmed from the company’s deferred PPA, which the Energy Regulatory Commission ordered stopped last month, according to Meralco president Jesus P. Francisco.

It will be recalled that Meralco was unable to immediately comply with the cease-and-desist order, explaining to the ERC that at the time the decision was handed down, it had already sent out its customers its April billings.

"We have not lifted our order. . . so, we are expecting Meralco to remove its deferred PPA portion from the rates it would be passing on to its customers within this billing period," ERC Chairman Fe B. Barin said.

Due to the ERC order, the recovery period is expected to be extended if Meralco would be able to justify its legal basis for implementing the proposed deferred PPA payments.

The main power retailer has vast under-recoveries of more than P12 billion since the end of 2001. From P12 billion in December, Meralco said it just recouped a little more than P1.1 billion from the deferred PPA charges that it had advanced to Napocor – the main beneficiary of the PPA and also its largest provider of power.

As of end-March the company’s total unrecovered costs from the deferred PPA stood at roughly P11 billion, according to Meralco assistant vice president for utility economics Ivanna dela Pena.