Meralco files petition to lower March generation charge

Posted at 03/09/10 5:24 PM

MANILA, Philippines - Power distributor Manila Electric Co. (Meralco) has filed a petition before the Energy Regulatory Commission (ERC) seeking to lower the hike in the generation charge for March billing to ease the financial burden on consumers.

Meralco said that for the supply month of February, it incurred a total generation cost of P15.9 billion, which would translate into a generation charge of P6.76 per kWh in customers' bills this month.

The power firm has proposed that the actual charge be cut by 44.46 centavos to P6.3154 per kWh. It also proposed that the balance of the generation cost, amounting to P1.046 billion, be spread over a 6-month period starting April 2010, representing a collection of around P0.07 per kWh monthly.

"Considering the pressing nature of the instant petition to shield the petitioner's end-users from such abrupt increase in generation costs, and to avoid any consequential financial prejudice to both petitioner and the consumers, it is therefore urgent that a provisional authority be immediately issued upon filing and pending hearing of the instant petition," Meralco told the ERC.

Under Article III, Section 2 of the Automatic Generation Rate Adjustment (AGRA) Rules, distribution utilities are authorized to automatically reflect the generation cost from their suppliers through the generation charge using a prescribed formula which ensures its pass-through nature. Since it is a pass-through charge, Meralco does not earn from it.

In its petition, Meralco said it would not be able to promptly pay the substantial cost of generation to its suppliers without immediately recovering this from its customers. Nonetheless, it said it wanted to trim the generation charge so as not to "place great financial burden on its customers."

Meralco noted that the sharp increase in the generation charge was "mostly accounted for by the high prices in the Wholesale Electricity Spot Market, brought about by the shortage in electricity supply, as there were several plants which were either out due to preventive or emergency maintenance, or with de-rated capacity because of the El Nino phenomenon."

It added that there was also an increase in demand due to the onset of the summer season.

Meralco has reminded all its customers to use electricity wisely during the hot months.

"Very simple tips such as using compact fluorescent lights instead of incandescent bulb, doing your ironing at one time and opening refrigerators only when needed will, in one way or the other, help a household save electricity," said Meralco external communications manager Joe Zaldarriaga.

"We also advise our customers to make sure that their household appliances are well maintained in order to cope with the expected increase in usage," he added.