Napocor general counsel Rainier Butalid told The STAR that the 25-centavo savings to the Meralco customers was based on the agreement entered into by the two power firms last March 2003.
"The primordial reason why we are having such agreement is to decrease the electricity rates. This whole exercise is designed to benefit the consumers," Butalid said.
The 25-centavo reduction in power rates, once the agreement is approved by the regulator, is more than double the 12-centavo savings estimated by Meralco.
Based on the March estimates, Meralco president Jesus Francisco said there will be a 12-centavo per kwh reduction to consumers net of penalties.
Francisco, however, said the savings to Meralco consumers may vary based on market prices‚ movement. "Prices move everyday. We do not know yet how much will be the reduction at present," he said.
Napocor and Meralco are expected to file a joint application with the Energy Regulatory Commission (ERC) next week.
Meralco submitted a draft application to Napocor. The state-owned power firm, on the other hand, will review and input necessary changes to the application.
Based on the agreement, Meralco will compensate Napocor the amount of P27.515 billion for the electricity it contracted but failed to purchase from the government-owned power corporation. On the other hand, Napocor will pay Meralco P7.465 Billion for its failure to provide transmission services to Meralco’s independent power producers. By offsetting, the net settlement would amount to P20.05 billion. The agreement will allow Meralco to pay this net settlement amount within five years.