Meralco customers complain as bills soar due to higher power rates, consumption

Entrepreneur Cynthia P. Coronel was surprised when she got her April power bill from Manila Electric Co. (Meralco) — she needs to pay more than P5,000, up from her P4,000 average in previous months. Coronel, a Pasig resident who has a foodcart business, lives with two housemates and has two large refrigerators. If rates continue to spike, profit margins of her small business will be affected. Meralco’s April bill reflected rate increases in two components — generation or power from suppliers that the utility merely passes on to consumers as collecting agent, and distribution or the price of Meralco’s delivery of electricity to homes. The generation rate, which accounts for more than half of the electricity bill, has gone up by 93 centavos to a record P6.7699 per kilowatt-hour (kwh) from P5.8417/kwh in the March billing, which was in turn 91 centavos higher than the P4.9303/kwh charged in February. The increase for March should have been 42 centavos higher, but Meralco was allowed to distribute that over six months. While Meralco’s distribution charge accounts for only a fifth of the bill, the utility has also increased its rate after getting approval from regulators. These rates are "socialized," meaning those who consume more pay higher rates. As a result, Paolo S. Mariano, who lives by himself in a house in Marikina, saw his bill go up to P4,052 from P2,960 in the previous month. His consumption went up to 321 kwh from 286 kwh. Households consuming up to 200 kwh a month pay only 85.47 centavos/kwh, but this goes up to P1.2298/kwh for more than 200 kwh, P1.5836/kwh for more than 300 kwh, and P2.1998/kwh for more than 400 kwh. Early this year, the residential distribution rates were only 69.17 centavos/kwh, 99.53 centavos, P1.2816, and P1.7803, respectively. And early last year, before regulators allowed Meralco to switch to a "performance-based" rate-fixing scheme from the old cost-plus scheme that capped the utility’s profits, the average rate was just 96.57 centavos/kwh. Including both generation and distribution charges, the average increase per kwh consumed is P1.2696 for April. In blogs and social networking sites such as Facebook, irate customers wondered why their bills had nearly doubled, when there had been rotating brownouts and homeowners had often gone out of town for vacation. The Facebook fan page "Protest against Meralco electricity price hike" had 5,492 fans as of this writing. "Expected ko na rin naman na tataas. Hindi ko lang naisip na magdo-doble (I expected it to go up but not about double)," Mariano, who writes for a local cable channel, said in an interview. "I wondered whether they intentionally increased prices because they knew demand would be high because of the hot weather. It looks like a convenient business," he added. Jose P. de Jesus, Meralco president and chief operating officer, said some meter readers have even been harassed. "That is really unfortunate. Wala namang kasalanan ang meter reader (meter readers are not to blame)," he said. De Jesus pointed out that only a portion of the bills actually goes to Meralco. "If they examin their bills, they will find that a big bulk actually goes to generation, so kung may kagagalitan sila dapat ‘yung mga (if they have to scold anybody, it is the) generation companies," de Jesus said. "We are only distributors. I hope they don’t shoot the messenger because we are only the collectors," he said. "There’s not much we can do except give more information and explain to the public," he added. The way Meralco gets power from power generators, though, is often questioned since one shareholder, the Lopez family, owns two of the plants — the natural gas-fed San Lorenzo and Sta. Rita power plants. Last month, a third of Meralco’s supply came from San Lorenzo and Sta. Rita, which charged P5.89/kwh and P6.76/kwh, respectively. The state-led National Power Corp., which supplied another third, charged P5.55/kwh. Meralco said San Lorenzo and Sta. Rita charged higher rates because they used more expensive fuel condensate since the Malampaya natural gas field was on preventive maintenance. Nearly a fifth of the supply came from the wholesale electricity spot market, which charged a whopping P11.36/kwh. Meralco executives said the utility had run out of supply options, considering the scarcity of capacity as a result of higher power demand. It is estimated that every degree increase in temperature hikes demand by an average 100 megawatts at any given time. Consumers likewise have no choice but to bear higher power costs. "It’s not like a mobile phone service where you can switch between telecom companies," Coronel said in Filipino.