ERC oks Meralco’s staggered rate hike

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Meralco will implement the increase in three installments: in December, February and March

HIGHER BILLS. Meralco customers will have to shell out more for electricity in December, February and March. AFP PHOTO/Jay Directo

MANILA, Philippines – The Energy Regulatory Commission (ERC) on Monday, December 9 approved Manila Electric Company’s (Meralco) plan to implement a P3.44 per kilowatt-hour (kWh) increase in its generation charge on staggered basis.

The P3.44 per kWh hike will translate into an additional P688 charge for consumers averaging 200 kWh of electricity usage per month.

In a letter to Meralco, ERC said the power distributor may collect the increase in three installments: P2 per kWh in December, P1 per kWh in February, and the balance in March.

“The ERC grants Meralco the clearance it seeks to stagger implementation of its generation cost recovery by way of an exception to the AGRA (Automatic Generation Rate Adjustment) rules,” said ERC Chairperson Zenaida Cruz-Ducut in the letter.

Meralco wrote the ERC on December 5 seeking clearance to stagger collection of its generation costs for the November 2013 supply month to lessen the impact on consumers.

“The ERC is well-aware of the huge impact that Meralco’s generation charge adjustment will have on the retail rates to its customers. Meralco’s proposal to stagger the implementation of its generation cost is timely as it will cushion the impact on the electricity consumers,” said the ERC.

Meralco said the increase in generation charge stemmed from the maintenance shutdown of the Malampaya facility and the outage of other power plants where it sources its power requirements from.

The Malampaya facility provides natural gas to the 1,200-megawatt (MW) Ilijan combined cycle natural gas plant owned by Kepco Philippines Corporation, and the 1000-MW Sta. Rita and 500-MW San Lorenzo natural gas facilities of First Gen Corporation of the Lopez group. These power plants provide 40% of Luzon’s electricity needs.

Because of the shutdown, Meralco was forced to source power from the Wholesale Electricity Spot Market and other power plants that ran on diesel, which was more expensive than natural gas.

For December alone, Meralco sought a total increase of P4.15 per kWh to take into account other charges such as transmission, VAT and franchise tax, system loss and lifeline rate subsidy. –

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