Meralco to raise distribution charge this month



MANILA, Philippines—Manila Electric Co. (Meralco) is set to implement an increase of 2.54 centavos per kilowatt-hour (kWh) on the distribution charge from this month to June 2014.

The increase is equivalent to P5 a month for consumers using 200 kWh a month.

The distribution charge accounts for less than one-fifth of a Meralco customer’s monthly electricity bill. The largest component, the generation charge, takes up almost 60 percent and is announced monthly. The generation charge for July is set to be announced next week.

In a disclosure to the Philippine Stock Exchange, Meralco said it had received an order from the Energy Regulatory Commission (ERC) approving a new distribution rate to be implemented from July 1 to June 30, 2014.

The order said the ERC provisionally approved the filing of Meralco on the prescribed distribution rate structure for its various customer classes.

“Accordingly, Meralco is directed to implement in its billing cycle the approved distribution, supply and metering charges,” the ERC order said.

The order noted that the approved rate was based on a “reasonable estimate” that factored in the distribution cost per kWh, on actual sales data in the review period (the year preceding the new implementation period) and on the projected sales for the implementation period.

Last year (the review period for 2013), it was assumed that there would be a certain number in kilowatt-hour sales, which was equivalent to P1.6303/kWh. However, the actual sales mix translated to just P1.6220/kWh, which resulted in an underrecovery of 0.83 centavo.

The ERC order also noted that the new maximum rate approved for the implementation period was P1.6474/kWh, a difference of 1.71 centavos/kWh from the previous rate.

The combination of the underrecovered 0.83 centavo/KWh and the difference of the new rate with the previous one (1.71 centavos/kWh) resulted in an increase of 2.54 centavos/kWh, which will be reflected in Meralco’s distribution charge for one year starting this month.

ERC Executive Director Francis Saturnino Juan said via phone patch: “If you convert that to a peso amount, that shows the approved revenue requirement. What happened was that actual sales, based on the September 2012 supply mix, were lower than the projected sales. It was the equivalent of P1.6220/kWh.

“So the revenue requirement was not met. There was a shortfall in revenue, which has to be recovered. The difference shows underrecovery for this year.”

The biggest factor in a Meralco customer’s monthly bill, taking up 58.2 percent, is the generation charge or cost of electricity sold by power producers and is announced monthly.

For example, in June, Meralco said the generation charge grew by 19 centavos per kWh to P5.66 per kWh compared with the previous month’s rate. Still, this was 48 centavos lower than the generation charge in June 2012.

Transmission charges, which account for 10.1 percent of a customer’s monthly bill, went up by 2 centavos per kWh on higher service charges incurred by National Grid Corp. of the Philippines from generators. Taxes, taking up 10.1 percent, increased by P1.50 per kWh.

System losses account for 5.4 percent of the total charges and the rest, or 16.2 percent, go to Meralco.

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Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • John Fereira

    Teka muna bakit naman itataas ang rate kung walang consumption, at hindi po yan gulay o prutas na nasisira at tinatapon sa basura. Hindi po mga tanga ang mga engineer at management dyan na mawawala lang ang kunyente sa ganoon lang na paraan na walang gumagamit, so may nakikinabang ba kuryente na pinapabayaran sa taong bayan.

    Ayan ang sinasabi ko na halos lahat ng SM facilities ay walang kwentador kaya they create this scenarios to deceive taong bayan at pumayag sa kanilang hangarin na kumita.

  • Pinoy Ako

    Generation charge is deregulated. It is protected by Epira approved even before Pnoy became president. So please let’s not blame Pnoy on this. Probably review Epira if there really is true competition created as promised. As far as I know, we only have 3 big players here (Aboitiz, San Miguel and First Gen). Mukhang Cartel. Dapat siguro Congress ang kulitin kasi sila ang naglegislate nito, baka sila ang nabayaran ng tinalaga nila ang 30% max ownership. Di ba pwede 10% para walang major player?

    Distribution charge is regulated by ERC and is both cost and performance based. Distribution companies need regulatory approvals before implementing any additional charges. Dito, baka pwedeng icheck kung walang connivance between regulatory and DUs. Di ako sure, pero talamak sa atin ang …. “pera lang yan”.

  • mdc™

    What again? Didn’t you just raised my bill last year by around P200/month? Now you are raising again. What kind of citizen’s daytime robbery you really doing? Meralco should be dismantled, or better yet, DEREGULATED. We should have deregulation to split Meralco into multiple owners and distribution organization. They need to be chopped down into pieces.

    They need direct competitions. I would say, get PG&E to compete with Meralco to get rid of these bastards and learn tough and fair competition.

    They do nothing but rob citizens and give nothing but brownouts, blackouts, low voltages and voltage fluctuations. I can not even get the right amps on 110v outlets. It won’t run my 110v appliances properly. Just the right amps on the low 110v please, give me a freåking break.

    They do not even give credit for the brownouts they caused to citizens. THAT IS ILLEGAL AND THEY MUST CREDIT ALL CUSTOMERS.

  • kismaytami

    Wala talagang kalugi-lugi ang mga oligarkiya ni abnoy.

  • disqus_ZrxaGjUzMQ

    here we go again with meralco

  • eagleclaw101

    Every time a there’s an anticipated drop on
    consumers electric bill due to lesser power consumption induced by occasional cooler
    climate… expect a corresponding kilowatt increase by the greedy and habitual
    manner of PNOY-government and MERALCO.

    • Cutie

      Ikaw kaya maging Presidente?

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