Every month, we all get the dreaded bill, right? And I’m certain you are as clueless as I am about the numerous items being charged to us by Meralco.
Now, the confirmation of an increase in electric rates is on the news. But what does it mean? Meralco only tells me that I will be paying more…as if the news should excite me! But what does this new rate have to do with the charges under my BILLING SUMMARY?
I stare at my electric bill as if it’s some kind of a math problem. Complicated as it is, I see the summary of my consumption and go “what the hell are all these charges?” So as a concerned citizen of the Philippines, and not to mention, a “loyal customer” (not by choice), I called up Meralco’s Call Center hotline 16211. I told the customer representative that I wanted to inquire about the numerous charges in my bill. Then she asked me what my SERVICE ID Number is…the address..telephone number…cellphone number…blah…blah…blah!
Getting irritated by all her unnecessary and time-consuming queries, I told her again WHAT MY CALL WAS ABOUT. I said that I only wanted to know the definitions of the charges stated in my bill. Then she told me to call my Meralco branch. “Why is that so? Can’t you tell me what they are?”, I asked. Then she hang up. A stupid bunch…that’s what call center agents are!
So I called the Kamuning branch. They just gave me a website address. This basically meant that I need to do the research by myself! As I was browsing Meralco’s website, I saw a list of definitions…take out all your bills everyone and follow me…
Total kWh: This is the amount of electricity you consumed during the billing period.
So if my Total kWh is 298, should I multiply that to the new rate per kWh, Php .0048, and I’ll get Php 1.4304 increase in my bill? Is that how it goes?
And these are the Details of Meralco’s Charges:
“For every Peso paid for the electric bill, approximately 13 centavos goes to Meralco.” So that’ll be approximately 88,706,300 consumers (that is if everybody has the conscience to pay) times Php .13 = Php 11,531,819 times every PESO paid? Assuming every person consumes Php 500 worth of electricity every month, then Php 5,765,909,500 or (Five BILLION, Seven Hundred Sixty-five MILLION, Nine Hundred Nine Thousand, Five Hundred pesos) will go to Meralco….every month? I’m sorry I think I got lost there somewhere…
And they’re still enforcing price hikes??? I wonder how much is Meralco’s Distribution Cost versus their Profit?
“Around 87 centavos or (goes to power suppliers and government. Meralco collects for them and remits to them each time you pay. That way, you only have one bill to pay.” (Am I supposed to be grateful to you now?)
This is the breakdown of your charges (in case you’re wondering:)
Generation – This goes to the generating companies (National Power Corporation and Independent Power Producers) or power suppliers.
Transmission – This goes to the Transmission Company (TransCo).
System Loss – This is the recovery of the cost of power loss due to technical and non-technical system losses.
Distribution – These charges go to Meralco and cover the cost of building, operating and maintaining its distribution system; billing, collection, customer service, records maintenance, and associated services; reading, operating and maintaining power metering facilities; and adjustments for the unavoidable fluctuations in the exchange rate of the Philippine Peso against the US Dollar.
Subsidies – The subsidies under this group provide for socialized pricing mechanisms for marginalized customers and the different customer classifications. (Ito ba yung binabayaran ko para sa mga squatters na gumagamit ng “libreng kuryente”?) Iba-iba pa pala ang binabayaran natin…depende kung mayaman (pinakamahal ang singgil)?…kung middle class (regular rates)?…at ang squatter (libre)?!
Goverment Taxes and Universal Charges – These subgroups include taxes and other charges remitted to the national and local governments and the Power Sector Assets and Liabilities Management Corporation (PSALM) to fund the electrification of remote areas not connected to the transmission system.
Other Charges – These refer to items not included above like backbillings, application of refund, prepayments, etc.
ERC allows reimbursement of MERALCO‘s Php 8.8 Billion generation cost
On January 18, 2008, the Energy Regulatory Commission (ERC) issued an Order authorizing the Manila Electric Company (MERALCO) to adjust its generation rates by PhPO.1662/kWh, effective its February billing. In the same Order, the ERC directed MERALCO to refund its Net Settlement Surplus (NSS) by implementing a rate reduction at PhPO.1614/kWh. Combining these two adjustments approved in the Order, the net impact for the MERALCO consumers would be an increase of PhP 0.0048/kWh only.
Said Order was issued in connection with MERALCO’s ten pending applications to recover adjustment in its generation and system loss charges for the months of August 2006 to May 2007. During these months, MERALCO was not allowed to automatically adjust its generation and system loss rates under the AGRA (Automatic Generation Rate Adjustment) Mechanism, pursuant to the Supreme Court’s Resolution in G.R. No. 163935 (NASECORE v. ERC and MERALCO) dated August 16, 2006. In compliance with the said Resolution, the ERC directed MERALCO to discontinue its implementation of the AGRA and, consequently, its generation rate was pegged at its August 2007 level of PhP4.42/kWh.
In its ten (10) resulting applications, MERALCO applied for authority to recover the total amount of PhP21 Billion, representing its alleged under recoveries for August to May 2007. After careful evaluation, the ERC was able to confirm so far the amount of PhP8.8 Billion only or less than half the total amount applied for, equivalent to PhPO.1614/kWh. This amount was verified to have been actually incurred by MERALCO and should already be recovered. The ERG’s Order provides some relief in MERALGO’s cash flow considering the billions it has advanced to its power suppliers, which have remained unrecovered. With this relief, MERALGO’s viability to remain in business to provide reliable service is assured and the possibility of imposition of additional carrying charges to cover its financing costs is minimized.
“These ultimately benefit the consumers,” ERC Chairman and CEO Rodolfo B. Albano Jr. explained.
The generation rate is a pass-through rate for the recovery of a distribution utilities’ (DUs) cost of power supplied to their customers. The DUs do not earn a single centavo from this charge. Unlike MERALCO, the other DU’s continued with the implementation of the AGRA as they were not party to G.R. No. 163935.
To cushion the impact of this increase, the ERC ordered MERALCO to at the same time refund its accumulated NSS at the rate of PhPO.1614/kWh. Until this NSS is fully refunded, the net increase that will be experienced by MERALCO consumers pursuant to the Order is PhP 0.0048/kWh only. The implementation of this net adjustment can be further mitigated by reductions in MERALCO’s present generation costs that may result from any ERC-approved rate reduction for NPC under its GRAM and ICERA.