Meralco’s power rates to decrease July

Rappler.com

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The utility firm says its customers’ distribution, supply, and metering charges will be down by around 5% to 7%

File photo by AFP

MANILA, Philippines – The Manila Electric Company’s (Meralco) power rates will go down next month after the Energy Regulatory Commission (ERC) approved the utility firm’s application for an adjustment in distribution, supply, and metering charges.

In a 20-page order dated May 5 and released Thursday, June 5, the ERC provisionally approved Meralco’s maximum average price (MAP) for regulatory year (RY) 2015 of P1.5562 per kilowatt hour (kWh), broken down into the unbundled components of distribution charge, P1.1398 per kWh; supply charge, P0.2537 per kWh; and metering charge, P0.1627 per kWh.

The approved MAP rate for RY 2015 rate is good for one year and is lower than its MAP for RY 2014 of P1.6474 per kWh.

The approved application will reduce Meralco customers’ distribution, supply, and metering charges by around 5% to 7%.  For instance, a residential customer consuming 200 kWh will have a combined P0.15 per kWh reduction in its bill from P2.35 per kWh to P2.20 per kWh, representing around 6% of what the customer currently pays. Implementation of the lower rates will be next month.

The distribution charge comprises 17% of the total electricity bill. Other bill components include generation charge, which represents bulk of the bill or 56%;  transmission charge, 10%; system loss charge, 4%; and taxes and other charges, 11%.

The MAP is allowed under the ERC’s rules for performance-based regulation (PBR), wherein the ERC reviews and verifies the rates of all private distribution utilities each year, considering such factors as their performance against technical and customer service standards.

Meralco said that under PBR, the annual revenue requirement, resulting indicative prices, and performance incentives were approved before the start of the regulatory period from July 2011 to June 2015. The distribution utility added that it was able to improve its service to the customers better than the standards set. Because of this, customers now experience lesser interruptions, lower system losses and faster customer response time. – Rappler.com

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