Electricity rates to go up again

Customers of the Manila Electric Co. (Meralco) should brace themselves for a new round of power rate increases as the utility firm is set to recover another P9.5 billion worth of under-recoveries.

In a disclosure to the Philippine Stock Exchange (PSE), Meralco said while the company has already filed for the recovery of P13.3 billion under-recoveries as of May 2007, it would need to recoup another P9.5 billion.

“In addition to the generation cost under-recoveries estimated at P13.3 billion as of end-May 2007, Meralco also has incurred under-recoveries in the transmission charge, system loss charge, and the collection of both inter-class and lifeline subsidies,” it said.

It said that under-recoveries in these other bill components add an estimated P9.5 billion, as of end-May 2007, to the company’s total under-recovery in the collection of pass through costs.

According to Meralco head for utility economics Ivanna dela Peña, the equivalent per kilowatt-hour (kWh) of these two applications for under-recoveries would depend on the period of recovery that would be approved by the Energy Regulatory Commission (ERC).

“(The rates) will vary. (The rates per kWh) depends on recovery period,” the official said.

Meralco filed with the ERC last July 26 an urgent motion to lift the suspension in the confirmation process of the relevant rules on the calculation of over/under-recovery in the implementation of automatic generation rate adjustment, system loss rates, and inter-class and lifeline subsidies, following the effectivity last June 26 of the amendment to the 4(e), Rule 3 of the Implementing Rules of the Electric Power Industry Reform Act (EPIRA) and the lifting by the ERC last June 28 of the suspension on the automatic adjustment of generation and system loss rates by distribution utilities (AGRA).

It would be recalled that the amendment to the EPIRA would enable distribution utilities like Meralco to automatically recover its generation costs.