Meralco raises rates by 14 cents

MANILA, Philippines - Customers of Manila Electric Co. (Meralco) can expect a 14.19-centavo increase in their electricity bills this month as the overall generation charge rose to P5.3470 per kilowatt-hour (kwh) from P5.2051 per kwh in September.

The increase, however, will be mitigated by a five-centavo reduction in Meralco’s distribution, metering and supply (DMS) charges starting this month.

The Energy Regulatory Commission (ERC) on Oct. 6 granted Meralco a provisional authority to reduce its Maximum Average Price (MAP) from P1.6464 to P1.6012 per kwh for the first year of the 3rd regulatory period. The 3rd regulatory period under Performance-Based Regulation (PBR) is from July 2011 to June 2015.

Meralco first vice president and head of regulatory management Ivanna de la Peña pointed out that the approved reduction in DMS will partly offset the 14.19-centavo increase in the cost of electricity sold by independent power producers (IPPs), National Power Corp. (Napocor) and generators selling through the Wholesale Electricity Spot Market (WESM) for the month of October.

With the newly approved rates, a household consuming 50 kwh will have a P7.57 reduction in the DMS component of the bill. Meanwhile, households using 70, 100, and 200 kwh will see reductions of P9.35, P12.02, and P20.92, respectively. Households using 200 kwh or less account for 74 percent of all residential customers in the Meralco area.

The DMS charge is a component in the electricity bill that goes directly to Meralco. The other components such as generation charge, missionary and universal fees are all pass-on costs which Meralco collects from its customers but are being paid or remitted back to the IPPs and the national government, respectively.

De la Peña attributed the increase in generation charge to the rise in the cost of electricity sold by power producers to Meralco.

She noted the use of more expensive liquid fuel by First Gas due to a supply restriction of Malampaya from Sept. 22-25, resulting in an increase of First Gas’ fuel cost.

She said that another factor that contributed to the increase in generation charge for October was the slightly lower dispatch of Quezon Power Philippines Limited (QPPL) from 90 percent to 88 percent and First Gas-Sta. Rita from 96 percent to 92 percent.

The depreciation of the peso against the US dollar was another reason that prompted the increase in the generation charge.

According to De la Peña, the reduced Meralco charges will stay until June 2012, while the up or down changes in the generation charge is on a monthly basis.

30-minute power shutdown

The Freedom from Debt Coalition (FDC) will hold a 30-minute power shutdown next week to protest the high cost of electricity.

The National Day of Protest, dubbed as “Power Off,” will be held from 7:30 p.m. to 8 p.m. on Oct. 11 in different parts of the country.

FDC members nationwide will switch their lights off and hold a noise barrage to dramatize their call to the Aquino administration to reduce electricity rates, which they claimed were the highest in Asia.

“We are happy to announce that our call for a National Day of Protest against the skyrocketing cost of electricity is gathering more and more support from many sectors throughout the country. There will be a ‘power off’ in communities, offices and households in various parts of Luzon, Visayas and Mindanao,” said FDC president Ric Reyes.

The group also wants a suspension of all pending hearings on petitions for higher electricity rates before the Energy Regulatory Commission, including the petitions on Stranded Debt and Stranded Contract Costs filed by Power Sector Assets and Liabilities Management Corp (PSALM) and Napocor.

“The Filipino people can no longer bear the current (power) rates in our country. It is already the highest in Asia and higher than Japan,” Reyes said.

“To raise it further by entertaining the new applications for power rate increases would be unconscionable,” he added.

FDC also called on the government to stop the privatization of the remaining assets and contracts of Napocor and immediately review the Electric Power Industry Reform Act (EPIRA).

Reyes said EPIRA, which was enacted 10 years ago, was supposed to bring down electricity rates, ensure reliable and accessible power supply and promote competition in a privatized power industry.

“What has come about is the complete opposite – ever rising cost of electricity, uncertain power supply to current users with many more in the countryside having no access to electricity, and an industry that has been gobbled up by super rich oligarchs in our country,” he stressed.

FDC also urged the government to remove the value-added tax on electricity. – With Reinir Padua, Jose Rodel Clapano