ERC allows Meralco to jack up rates
11/27/2009 | 05:01 PM
Manila Electric Co. will be charging higher power rates to its customers starting next month to recoup under-recoveries it incurred in the implementation of its lifeline charge and inter-class cross subsidy.
The Energy Regulatory Commission has allowed Meralco to increase its rates by less than two centavos per kilowatt hour in December.
The recovery period will be carried out by Meralco for four years.
A subscriber who consumes 200 kWH will have to cough up P4 more monthly.
The ERC decision noted that Meralco has incurred some P856.36-million under-recoveries, lower than the P863.95 million that the company had asked for.
The lifeline charge subsidizes the discounts in the electricity rates which Meralco gives to its lifeline customers. This charge is fixed based on a certain assumed kWh consumption for the lifeline customers and kWh sales to the non-lifeline customers.
The kWh consumption and sales per month varies from the fixing of the lifeline charge. When the amounts collected from the lifeline customers are not sufficient, either because there was an increase in the kWh consumption of the lifeline customers or a reduction in the kWh sales to the non-life customers or a combination of these factors, Meralco is constrained to shoulder the shortfall.
Meralco’s collection of under-recoveries worth P1.048 billion was also allowed by ERC for the inter-class cross subsidy charge implementation or equivalent to 1.03 centavos per kWh.
ERC said the approved under-recoveries for inter-class subsidy of Meralco was lower than the P1.053 billion that the company sought.
"The ERC meticulously pored through the various submissions of Meralco and determined that these under-recoveries, which the disallowances it ordered, are part of the just and reasonable costs that the law allows a utility to recover," said Francis Saturnino Juan, ERC executive director. - GMANews.TV
The Energy Regulatory Commission has allowed Meralco to increase its rates by less than two centavos per kilowatt hour in December.
The recovery period will be carried out by Meralco for four years.
A subscriber who consumes 200 kWH will have to cough up P4 more monthly.
The ERC decision noted that Meralco has incurred some P856.36-million under-recoveries, lower than the P863.95 million that the company had asked for.
The lifeline charge subsidizes the discounts in the electricity rates which Meralco gives to its lifeline customers. This charge is fixed based on a certain assumed kWh consumption for the lifeline customers and kWh sales to the non-lifeline customers.
The kWh consumption and sales per month varies from the fixing of the lifeline charge. When the amounts collected from the lifeline customers are not sufficient, either because there was an increase in the kWh consumption of the lifeline customers or a reduction in the kWh sales to the non-life customers or a combination of these factors, Meralco is constrained to shoulder the shortfall.
Meralco’s collection of under-recoveries worth P1.048 billion was also allowed by ERC for the inter-class cross subsidy charge implementation or equivalent to 1.03 centavos per kWh.
ERC said the approved under-recoveries for inter-class subsidy of Meralco was lower than the P1.053 billion that the company sought.
"The ERC meticulously pored through the various submissions of Meralco and determined that these under-recoveries, which the disallowances it ordered, are part of the just and reasonable costs that the law allows a utility to recover," said Francis Saturnino Juan, ERC executive director. - GMANews.TV
