Meralco: Distribution charges go down

MANILA, Philippines - The Manila Electric Co. (Meralco) yesterday clarified that its charges went down, contrary to reports that it raised its rates.

In a statement, it 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.

The Energy Regulatory Commission (ERC) released an order on Oct. 6, granting Meralco provisional authority to reduce its Maximum Average Price (MAP) from P1.6464 to P1.6012 per kWh for the first year of the third regulatory period, which covers July 2011 to June 2015.

With the ERC-approved charges, a household consuming 50 kWh a month will have a P7.57 reduction in the Meralco component of their bill, which is essentially the distribution charge.

Households consuming 70, 100 and 200 kWh a month will see reductions of P9.35, P12.02 and P20.92, respectively.

Records show that households using 200 kWh or less a month account for 74 percent of all residential customers in the Meralco franchise area.

Meralco also clarified that what went up by 14.19 centavos per kWh for the October billing month was the cost of electricity sold by independent power producers (IPPs) First Gas and Quezon Power and generators selling through the WESM.

Meralco said this amount does not go to Meralco as it is an entirely pass through cost and is revenue neutral to Meralco. The cost which is paid by the consumers through Meralco goes directly to the IPPs and the Wholesale Electricity Spot Market (WESM).

The reason for the increase in the cost of the power suppliers include the use of the more expensive fuel by First Gas due to supply restriction of Malampaya from Sept. 22 to 25. This resulted in an increase of the First Gas’ fuel cost.

Also contributing to the increase in the generation charge are the slightly lower dispatch of QPPL and First Gas Sta. Rita as well as the depreciation of the peso against the US dollar.