MANILA - The Energy Regulatory Commission (ERC) has allowed Manila Electric Co. (Meralco) to collect P1.9 billion in underrecovery charges, which will translate to a slight increase in electricity bills next month.

Meralco said it will jack up its rates by less than 2 centavos per kilowatthour (kWh) starting December, which will be carried out by the power firm for 4 years. Residential customers consuming 200 kWh will see a P4-increase in their monthly bill.

"The imposition of the additional rates is expected to last for 4 years only and as soon as the full amount of the underrecoveries are recovered, Meralco shall desist from further collecting the same," ERC said in a statement released Friday.

In its November 16 decision, ERC allowed Meralco to collect P856.36-million underrecoveries in the implementation of its lifeline charge, or an additional 68 centavos per kWh in monthly bills. The approved amount is lower than the P863.95 million applied for by Meralco.

In a separate decision, ERC also allowed Meralco to collect P1.048 billion worth of underrecoveries under the inter-class cross subsidy charge implementation, or about 1.03 centavos per kWh in monthly bills. This is also lower than the P1.053-billion collection that Meralco requested for.

Lifeline charges are fixed based on a certain assumed kWh consumption of lifeline customers, and kWh sales of non-lifeline customers.

Meralco incurs underrecoveries when amounts collected from lifeline customers are not enough, either due to higher kWh consumption of lifeline consumers or because of lower kWh sales to non-life customers.