Power rate hike lower in Metro

MANILA, Philippines - The increase in electricity rates triggered by the higher cost of energy supplied by the National Power Corp. (Napocor) will be less in areas serviced by the Manila Electric Co. (Meralco).

“The Napocor increase will be diluted to only about 28 centavos per kilowatt-hour (kwh) for Meralco residential customers since the distribution utility sources only a portion of its power requirements from Napocor,” said Meralco utility economics head Lawrence Fernandez.

He said Meralco sources its power requirements from several generators to secure the right mix of power. Meralco areas cover Metro Manila and nearby provinces.

On March 26, the Energy Regulatory Commission (ERC) allowed Napocor and the Power Sector Assets and Liabilities Management Corp. (PSALM) to charge 69.04 centavos per kwh more in Luzon to enable them to recover costs incurred from 2007 to 2010.

Under the Electric Power Industry Reform Act of 2001, Napocor and PSALM may apply for generation rate adjustment mechanism and incremental currency exchange rate adjustment to recover costs. The adjustments are then passed on to consumers.

“As directed by the ERC, the adjustment will be reflected in Napocor’s April bill to Meralco. In turn, this will be reflected in the May bill of consumers as an adjustment in the generation charge,” Meralco said.

Meralco will collect the generation adjustment from customers on behalf of Napocor and PSALM.

On Thursday, the ERC said Meralco can start collecting in May P0.0007 to P0.0476 per kwh from its customers. This will also allow Meralco to recover local franchise taxes it paid to the local government as early as 1993.

Meanwhile, Meralco said it has already filed a petition for the verification of its Maximum Average Price for regulatory year 2013 and its translation into distribution rate structures for its various customer classes.

The filing is in line with the Performance-Based Regulation (PBR) of the ERC. “Under PBR, distribution utilities like Meralco have to submit to an annual verification of its tariffs under PBR,” the company said.

The petition will then be subjected to public hearings and ERC scrutiny.

Meralco, the country’s largest power distributor, had 5.3 million customers last year, up 3.7 percent from a year ago. – Neil Jerome Morales