Meralco rates to go down

Over four million customers of the Manila Electric Co. (Meralco) will soon enjoy a reduction of 12 centavos per kwh in their electricity bills, a ranking energy official said.

National Power Corp. (Napocor) president Cyril del Callar said they have finished the reconciliation of accounts with Meralco for the Mandatory Rate Reduction (MRR) under the Electric Power Industry Reform Act (EPIRA).

“We have just finished reconciling our accounts with Meralco for this MRR, and we hope they will now come up with the pro-rated MRR for residential consumers,” he said.

Under the MRR, customers of Napocor will enjoy a 30-centavo automatic rate cut in their bills depending on the level of power they source from the state-owned power generation firm.

“Should our customers opt to purchase at higher or more constant level from Napocor, their consumers will not only enjoy more stable rates, but also benefit from the MRR of 30 centavos per kwh which only Napocor provides to household and residential consumers of its customer distribution utilities, as provided for by the EPIRA,” Del Callar said.

The EPIRA prescribes that “residential end-users shall be granted a rate reduction from Napocor rates of 30 centavos per kwh. Such reduction shall be reflected as a separate item in the consumer billing statement.”

This rate reduction was mandated under the EPIRA as an advanced benefit to consumers resulting from the absorption of at least P200 billion of Napocor’s debts by the national government.

For the past 10 months, Napocor and Meralco were not able to pass on the MRR. Meralco, during the 10-month period, sourced 40 percent of its power requirement from Napocor. This means the MRR for Meralco consumers will be equivalent to 40 percent of 30 centavos or 12 centavos, hence a total of P1.20 for 10 months.

When Napocor and Meralco signed their additional transition supply contract (TSC) in November 2006, there was a slight confusion on the pass-through scheme/formula on the MRR policy.

Under the new TSC of the two power firms, Meralco agreed to source more of its power requirement from Napocor. Thus, there is a need to adjust the MRR computation.

“For the past months, we have not felt any, reckoning from the signing of contract in November last year. Then there should be a corresponding rate cut for all residential consumers of Meralco,” Del Callar said.

The Napocor chief also pointed out that “we do not, and cannot, influence our customers when it comes to their purchasing strategies and behavior.”

Meanwhile, Meralco head for utility economics head Ivanna dela Pena said they welcome Napocor’s statement that it has finally settled the MRR computation.

“Meralco has been persistently following up with the Napocor since November last year the mandated rate reductions consumers should get under the EPIRA,” she said.

“We have been writing them about that. If it were true that Napocor has finally settled its books after 10 months on the MRR, it would be a welcome development for our consumers. Thus, it is Napocor’s responsibility to pass it on to its customers, including Meralco,” Dela Pena added.