Higher Meralco billings due to Napocor rate hike
Tuesday, November 09, 2004
The Manila Electric Company (Meralco) will collect more from its customers this month with the rise in electricity prices to PhP4.57 per kilowatthour from PhP3.50.
Company vice-president Ivanna G. dela Peña said the PhP1.075 per kilowatthour increase would affect residential, industrial, and commercial consumers. Exempt are lifeline users or those who consume less than 100 kilowatthours monthly.
"The new generation charge will be across all customer classes," she said in an interview.
Residential customers consuming an average of 250 kilowatthours will pay a generation charge of PhP1,142.50 instead of PhP873.75. Large customers can expect bigger price adjustments.
In a statement, Meralco said the price increase was the result of the Energy Regulatory Commission's (ERC) approval of a price increase for state-owned National Power Corporation (Napocor).
Meralco also said a new mechanism allowed for automatic recovery of fluctuations in generation costs.
"Starting this month, the generation charge and system loss charge will adjust monthly in accordance with [the commission's] new guidelines on the automatic adjustment of generation rates and system loss rates by distribution utilities," Meralco said.
Regulators last month approved new guidelines allowing electricity distributors like Meralco to automatically raise or cut prices monthly, replacing the Generation Rate Adjustment Mechanism (GRAM).
Meralco said the new mechanism addressed delays posed by the application and review process under GRAM.
A Meralco official also said the price increase would be least felt by poor residences.
"Lifeline users will not feel the full impact of the increases in the generation and system loss charges.
Those consuming within 50 kilowatthour per month get a 50% monthly discount on their bill. Those consuming 51-70 kilowatthours get a 35% discount, while those consuming 71-100 kilowatthours get a 20% discount," the official said.
Meralco said consumers would also see a 40% cut in the "interclass subsidy" component of their November billings as a result of the withdrawal of cross-subsidies.
Regulators are implementing Section 74 of the Electricity Power Industry Reform Act (EPIRA), which requires the removal of cross-subsidies for a fair and favorable treatment of all customer classes.
In effect, the commercial and industrial sector will no longer subsidize the electricity bills of residential consumers.
Generation and system loss charges are pass-through charges, while inter-class subsidies are cost transfers from one customer group to another.
The Department of Energy earlier said regulators' decision to scrap cross-subsidies for residential customers would not only reflect the true cost of powers, but would also boost investor-confidence in the power sector.
For its part, the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) said the decision would strengthen the competitiveness of the power sector as well as the electronics manufacturing industry.
"Consumers are assured that they are paying for the updated cost of electricity since any change in the generation cost will immediately be reflected in their bill," Meralco said.
It also said customers could track monthly all changes in cost items pertaining to generation cost such as fuel, foreign exchange, and independent power producer costs.
Meralco also called for a "wise and efficient use of power" as a way of mitigating rate adjustments. -- Bernadette S. Sto. Domingo
posted by philpower @ 5:40 PM,
