Meralco rates down this month

MANILA, Philippines - The Manila Electric Co. (Meralco) will collect 27 centavos less per kilowatt-hour (kwh) from consumers this month.

“We will be implementing changes in the generation, transmission, and distribution charges. For our consumers, this will mean a net reduction of around 27 centavos per kwh in their electric rates,” Meralco spokesman Joe Zaldarriaga said.

Earlier, Meralco estimated that the reduction this month would be around 20 centavos per kwh on lower generation charge.

“Power purchased from the National Power Corp. and independent power producers (IPPs) went down 30 centavos per kwh and an estimated 24 centavos per kwh, respectively,” he said. 

“These more than offset higher rates from the Wholesale Electricity Spot Market (WESM),” he added.

Meralco sources more than 40 percent of its supply from Napocor, and the rest from IPPs First Gas Corp. (35 percent) and Quezon Power Philippines Inc. (12 percent).  It gets the remaining 12 percent came from WESM.

Meralco also said transmission charge to consumers would go down by 23 centavos per kwh.  

Zaldarriaga said a reduction was possible because they had already completed the collection of transmission cost under-recoveries.

He also said they would be implementing this month new distribution, supply, and metering charges approved by the Energy Regulatory Commission (ERC).

The ERC approved a maximum average price (MAP) of P1.6464 per kwh for the regulatory year 2011 from July 2010 to June this year. The figure represents a 15 centavos per kwh adjustment from the previous P1.4917.

The rates may be adjusted, depending on Meralco’s performance vis-a-vis standards set by the regulator under the Performance Based Regulation (PBR).

“Meralco asked for a higher MAP of P2.6493 per kwh but the ERC approved only P1.6464 per kwh with the application of the provision for ‘side constraints’ to prevent a price shock to consumers,” ERC executive director Francis Saturnino Juan said in a press statement.

“Side constraints are imbedded in the Rules for the Setting of the Distribution Wheeling Rates to temper any upward price adjustments and thus prevent customers from experiencing price shocks,” he said.

“Customers should be given value for the money they pay while utilities should be assured of rates that would allow them to operate efficiently. Under PBR, these twin objectives are served and promoted, making it a win-win for both customer and utility,” Juan said.