Meralco to seek 45¢ per kwh rate hike

MANILA, Philippines - As millions of households try to come to terms with atrociously high electricity bills, power distributor Manila Electric Co. (Meralco) announced yesterday it is preparing to file an application for a rate hike of 45 centavos per kilowatt-hour (kwh) with the Energy Regulatory Commission (ERC) to reflect the cost of generation for December last year.

In a statement, Meralco said they have recalculated their petition for rate hike for December, taking into account the recalculation made by the Philippine Electricity Market Corp. (PEMC).

On ERC’s order, PEMC came up with recalculated Wholesale Electricity Spot Market (WESM) rates for the December 2013 supply month, which resulted in an adjusted generation charge of P6.12 per kwh for the January 2014 billing, instead of the original generation charge of P10.23 per kwh.

“This translates to a 45-centavo per kwh difference from the P5.67 per kwh rate implemented in the January bill. Before the recalculation, that difference was at P4.56 per kwh,” Meralco said.

The power distributor arrived at the recalculated rate after receiving the validated WESM figures from the revised WESM billings as well as the recomputed cost of replacement power for Sual and Masinloc for the supply month of December 2013.

Effective WESM rate for the December supply month went down from P36.08 per kwh to P8.33 per kwh after the PEMC recalculation.

For a typical household with a monthly consumption of around 200 kwh, the overall rate increase – incorporating corresponding adjustments in taxes and other charges – will be 65 centavos per kwh instead of the original calculated overall increase of P5.33 per kwh for the January bill.

In an order issued after months of investigation, the ERC said there was market failure at the WESM as it voided the prices in November 2013 and December 2013 supply months and ordered the PEMC to re-calculate the rates.

Meralco said it would seek guidance from the ERC on how it could recover the adjusted charges for the January bills.

The utility company said it would propose a recovery scheme that would take into consideration customers’ best interest.

Meralco also clarified that it has yet to receive the PEMC billing for the November 2013 supply month as the Supreme Court temporary restraining order (TRO) on the distributor’s planned rate hike is still in effect. The PEMC billing will impact on the December 2013 generation charge.

Meralco also assured its customers that the computation of the generation charge would be transparent and that whatever adjustment made to it as a result of the ERC mandated recalculation would accurately reflect in their bills.

ERC executive director Francis Saturnino Juan, in a phone interview, said they have yet to receive Meralco’s petition.

“We will decide based on their revised petition,” Juan said, noting that Meralco already has a pending rate hike petition for the same period. “It’s up to Meralco if they will file a new petition or just revise their existing petition.”

Juan declined to say how soon they would be able to come up with a decision.

“This will depend on the parties involved, depending on the number of parties that will intervene. We will still subject this to public hearings,” Juan said.