Meralco power bills likely to go down with approval of PSA, POP program

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MANILA, Philippines—Customers of power distributor Manila Electric Co. may expect their electricity rates to go down, after the Energy Regulatory Commission approved the utility’s new power supply agreements (PSAs) and its peak/off-peak (POP) program.

These new supply contracts are seen to reduce the generation charge, the largest component of a power bill, by an average of 19 centavos per kilowatt-hour starting 2013, while the POP program is expected to generate electricity savings up to 10 percent.

“Meralco exerted extensive efforts to negotiate for these PSAs that would avert possible price shock in the light of the expiration of the company’s Transition Supply Contract (TSC) with the National Power Corp. last December 26, 2012,” said Alfredo S. Panlilio, Meralco SVP for customer retail services and corporate communications.

These new PSAs, according to Panlilio, are in accordance with Meralco’s mandate for least-cost supply.

The distribution utility earlier signed these new power supply agreements with Sem-Calaca Power Corp. (SCPC) of the Consunji group; South Premiere Power Corp. (SPPC); San Miguel Energy Corp. (SMEC); Masinloc Power Partners Co. Ltd. (MPPCL); and Aboitiz-led Therma Luzon Inc. (TLI).

In another development, Meralco reported that the ERC had given a provisional approval for Meralco to implement its POP program (formerly known as Meralco Time-of-Use, or TOU, program).

The timely approval of Meralco’s POP program will provide an alternative to a significant number of Meralco’s large corporate customers who were previously part of the TOU and Ecozone Rate programs, which expired last Dec. 26, 2012.

For old and new subscribers alike, implementation of the POP program is set to begin on Feb. 1 this year.

“An initial evaluation of the instant application disclosed that Meralco’s proposed revised TOU rates will address its social commitment to its customers, especially its large industrial and commercial customers, by enticing them to invest in the country by way of just and reasonable costs of electricity. Said TOU program will help boost the country’s economic condition, which will ultimately redound to the benefit of the consumers,” the ERC said in its decision.

“We, in Meralco, appreciate the approval made by ERC and are happy about this development for our customers. With the POP program, affordable electricity rate options continue to be available to customers, especially to our large customers who, through said program, can help contain cost of production and remain competitive in their area of business,” Panlilio said.

Eligible to enroll in Meralco’s POP program are non-residential customers with at least 5-kilowatt monthly average demand. Customers availing of the POP rates are expected to experience savings of up to 10 percent on the average versus regular Meralco rates in their monthly bills depending on their peak and off-peak consumption.