Meralco seeks increase in distribution charges

MANILA, Philippines—Manila Electric Co., the country’s biggest power distributor, seeks to increase its distribution, supply and metering charges by 2.07 centavos per kilowatt-hour to P1.6510 per kWh.

The distribution utility currently collects P1.6303 per kWh to cover these costs.

Based on its application with the Energy Regulatory Commission, Meralco wants to collect P1.1986 per kWh in distribution charge, 27.57 centavos per kWh in supply charge, and 17.67 centavos per kWh in metering charge.

Based on the February 2013 billing, the P1.6510 per kWh being sought accounts for roughly 18 percent of the total charges billed to a Meralco customer.

The yearly adjustment of the distribution, supply and metering charges is allowed under the performance-based regulation scheme (PBR), an internationally accepted mechanism that promotes the efficient operation of utility firms, enabling them to render high quality service to their customers.

Meralco adopted this scheme in 2007 and has since built more facilities to improve service delivery to its more than 5 million customers.

Under this scheme, regulated distribution utilities like Meralco are subjected to a rate cap that is adjusted annually, based on their proposed capital spending for a given year.

Meralco said in its application that the issuance of a provisional authority to collect the new amount would enable it to “implement in a timely manner its capital expenditure program and address its operating and maintenance requirements for the third regulatory period particularly for regulatory year 2014 (July 1, 2013 up to June 30, 2014).”

For this year, the distribution utility plans to invest roughly P11 billion for its capital expenditure projects, according to Meralco president Oscar S. Reyes.