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Friday, March 29, 2024

Meralco starts P7.8b refund, cuts instead of hikes prevailing charges

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The Manila Electric Co. (Meralco) starts implementing this month the P7.8 billion refund to consumers as ordered by the Energy Regulatory Commission ((ERC).

The absolute amount however is P0.12 per kilowatt-hour which is equivalent to about P24 reduction in the total billing of households consuming 200 kwh a month, Meralco vice president and spokesman Joe Zaldarriaga said.

In effect, Meralco’s prevailing charge of P10.1830/kwh is reduced to P10.0630/kwh.

“We are happy to note that instead of an upward adjustment we will be having a reduction for the month of May,” Zaldarriaga said.

The ERC ordered Meralco to refund P77.8 billion to power users following the validation of the utility’s 3rd Regulatory Period (3RP) tariffs for the period July 2011 to June 2015 (RY 2012-2015).

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The refund of distribution-related charges is equivalent to P0.4669/kwh for residential customers which will appear as a separate line item in customers’ power bills.

Zaldarriaga said despite the adjustment in generation cost of almost P0.36/kwh and the slight increase in the transmission charge, consumers still had a reduction for May in terms of overall charges.

“As a highly regulated entity, Meralco’s rates are constantly being reviewed to make sure they are fair and reasonable,” Jose Ronald Valles, Meralco head of regulatory management, said.

“The immediate implementation of the ERC’s order more than offset the impact of the increase of the generation charge this month, benefitting Meralco customers,” Valles added.

The generation charge for May went up by P0.3553 to P6.2277/kwh from the P5.8724/kwh registered the previous month.

Charges from Meralco’s power supply agreements (PSAs) for this month went up by P0.8045, while charges from independent power producers (IPPs) decreased by P0.4319 per kWh.

The price of Malampaya natural gas increased by 10 percent starting this quarter, reflecting recent spikes in world crude oil prices.

Power suppliers that have pass-through adjustments in Malampaya fuel—namely, First Gas-Sta. Rita, First Gas-San Lorenzo, and First Natgas- San Gabriel—accounted for 36 percent of Meralco’s supply in April.

These suppliers’ charges were also affected by the peso’s depreciation and an increase in usage of more expensive liquid fuel resulting from the Malampaya consortium’s continued failure to provide adequate natural gas supply.

Meralco vice president and head of utility economics Lawrence Fernandez said this month’s generation charge also includes the second of three installments covering the deferred generation costs for the

March bill and the first of three installments for the deferred generation costs for the April bill.

These installments were equivalent to an add-on of around P0.20/kwh in the generation charge.

Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) went down by P0.8664 per kWh as demand in the Luzon Grid decreased due to non-working holidays and cooler temperatures in April.

Meralco sourced the bulk of its power requirements from its PSA at 48 percent, followed by IPPs at 41 percent and the WESM, the trading floor of electricity at 11 percent.

Transmission charges, taxes, and other charges for residential customers had a slight decrease of P0.0084 per kWh.

The collection of P0.0025 per kWh representing the universal charge-environmental charge remains suspended as ordered by the ERC.

Meralco said it only earns from distribution, supply, and metering charges, which have remained unchanged since the reduction in July 2015.

Meanwhile, pass-through charges from generation and transmission are paid to the power suppliers and the system operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are all remitted to the government.

As this developed, Meralco said it did not experience any major power interruption during the May 9 national and local elections.

The distribution utility reported 35 isolated outage incidents, all of which were immediately addressed by field personnel that was strategically positioned across its franchise area.

“The power outages were all isolated cases and were immediately restored. We thank our crew, contractors, and customer care group for their round-the-clock assistance to the polling and canvassing centers and local government units,” Zaldarriaga said.

“We will continue to be on alert to respond to any distribution-related problem until the conclusion of the election process,” he added.

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