PBR scheme starting to bring down power rates - ERC

MANILA, Philippines - The Energy Regulatory Commission (ERC) said yesterday the implementation of the performance-based regulation (PBR) scheme is starting to bring down electricity rates.

ERC chairperson Zenaida G. Cruz-Ducut said their recent decision on Manila Electric Co.’s PBR has effectively lowered power rates.

“The benefit of PBR is now becoming more evident with these lowered distribution rates of Meralco and the corresponding improved quality service levels,” Ducut said.

“Note that the same decreasing rate pattern was likewise experienced in the case of the transmission rates approved for the National Grid Corporation of the Philippines (NGCP),” she added.

The ERC provisionally approved on Oct. 3, 2011 the translation of the P1.6012/per kilowatthour (kwh) year 2012 maximum average price (MAP) of Meralco.

“That 2012 MAP is P0.0452/kwh lower than its 2011 average distribution rate of P1.6464/kwh. The reduced distribution rates will take effect in the October 2011 billing of Meralco,” the ERC executive said.

On June 6, 2011, the ERC issued a decision regarding the final rate determination for Meralco which prescribed its 2012 MAP for the third regulatory period.

In the final determination, Meralco was required to translate into distribution rates the MAP for regulatory year 2012 under the PBR methodology.

In same decision, the ERC also adopted a more stringent performance incentive scheme which mandated Meralco to strictly observe the approved performance indicators and provided it the appropriate incentives for it to improve its services to electricity end-users.

The rate translation applied for by Meralco, upon initial evaluation by the ERC, was found to be in conformity with the final determination and with the requirements of the Rules in Setting Distribution Wheeling Rates (RDWR).

Meralco, ERC said, was in adherence with the uniform filing requirements of the ERC.

“The functionalization and allocation factors were well-structured and supported by detailed analyses,” Ducut said.

Meralco earlier reiterated that a reduction of an average of five centavos in its distribution, metering and supply charges will be felt by consumers for the billing month of October.