Meralco customers to see lower rates in Jan

abs-cbnNEWS.com | 12/29/2009 7:04 PM

MANILA, Philippines –
The Energy Regulatory Commission (ERC) has allowed Manila Electric Co. (Meralco) to
increase its average rates by 26.9 centavos per kilowatt hour (kWh) next year.
Meralco, however, said the rate hike would not be felt due to a drop in other charges next month.
Meralco will increase its distribution, supply, and metering charges for 2010 for its various
customers.
But with the 26 to 27-centavo per kWh drop in generation charge next month, as well as
the 3-centavo decline in system loss charges, Meralco customers will see a net reduction of 2 to 3
centavos in their January bill.
The utility firm said the decline in generation charges is due to the lower-priced gas used by
independent power producers supplying 55% of Meralco's requirement.
"Even with the PBR (performance-based regulation) adjustment of 26.9 centavos recently
approved by ERC, customers will still see a net reduction of around 2 to 3 centavos in their
January bills," Meralco vice president and utility economics head Ivanna dela Pena said in a
statement released Tuesday.
"The ERC is optimistic that, nothwithstanding the increase in Meralco's rates, the reduction in
the other charges in the customers' total bill will be more than sufficient to mitigate or even offset
the impact of this adjustment," ERC executive director Francis Saturnino Juan said in a separate
statement. With a report from Reuters

ERC approves increase in Meralco distribution charge to

P0.269/kWh
By MYRNA M. VELASCO
December 29, 2009, 6:11pm
For regulatory year 2010, the distribution charge of Manila Electric Company (Meralco) will go
up by P0.269 per kilowatt hour to P1.4917 from P1.2227 per kWh currently based on the
approval granted by the Energy Regulatory Commission (ERC), and this will be reflected
starting in January billing cycle.
Nevertheless, for the same billing period, the anticipated increase in Meralco bill will be offset
by the significant reduction in the utility firm’s generation charge, which will likely average by
P0.26 to P0.27 per kWh which will just be enough to offset the rate adjustment for the month.
The adjusted Meralco tariff had been based on its filing for performance-based regulation (PBR)
as part of its revenue shoring up measure to sustain viability.

The ERC, in its Order, emphasized that the approved PBR tariff of Meralco for 2010 was lower
than the maximum average price of P1.9410 per kWh that the utility firm has applied for.
The rate adjustment, it was noted, “takes into account economic factors such as inflation and
foreign exchange rate, as well as the DU’s (distribution utility) actual performance in terms of
the approved Performance Incentive Scheme (PIS) and the previous years’ under/over recoveries
in its distribution revenues.”
The regulatory body added that “with this resulting increase, following the rovision on side
constraints, which mitigates the adjustment that can be allowed for a DU so as to prevent huge
price increases for its consumers, Meralco’s 2010 rate was subjected to a ceiling computed at
P1.4917/kWh.”
Meanwhile, on Meralco customers’ overall bill for January, company executives noted that the
overall effect would still be a reduction, with expectations of significant downtrend on its
generation cost.
The generation charge though changes on a monthly basis; while the adjusted distribution charge
will be in force until the next regulatory reset in year 2011.
Meralco vice president and utility economics head Ivanna G. dela Pena noted that based on
estimates, “the generation charge is expected to go down by around 26 to 27 centavos per kwh in
January,” following utilization of banked gas by its contracted natural gas-fed power producer.

Meralco gets nod to hike charges starting January

12/29/2009 | 06:22 PM

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The Energy Regulatory Commission (ERC) has approved Manila Electric Co.'s (Meralco)
petition to increase distribution, supply and metering charges.

The regulator gave Meralco the go-signal to impose a 26.9-centavo hike to P1.4917 per
kilowatt-hour (kWh) at the start of the year.

But the regulator said it was optimistic the hike would be offset by the cut the utility's other
charges.

"The ERC is optimistic that, notwithstanding the increase in Meralco's rates, the reduction in
the other charges in the customers' total bill will be more than sufficient to mitigate or even
offset the impact of this adjustment," ERC Executive Director Francis Saturnino Juan said.

Under the scheme, residential customers who consume 200 kilowatt-hours (kWh) per
month must pay P81.30 more, or a higher 40.54-centavo hike per kWh, assuming all other
charges are unchanged.

Lifeline consumers will continue to enjoy discounts under Meralco's lifeline program, which
subsidizes poor consumers with monthly billings of 100 kilowatt hours or less.
But in a separate statement, Meralco said generation charges would also drop starting
January.

"Based on estimates as of December 25, the generation charge is expected to go down by

26-27 centavos per kwh in January, continuing the downward trend exhibited since May
2009," the company said.

Meralco external communications manager Joe Zaldarriaga said their customers could
expect better and more reliable service. "This is our continuing commitment to our close to
five million customers," he said. — GMANews.TV