ERC rules on MERALCO PBR rates
The ERC issued on 23 April 2009 its Order resolving the pending motions on its Decision on MERALCO’s rates set under Performance-Based Regulation (PBR). It will be recalled that ERC released its Decision on MERALCO’s rates for Regulatory Year 2009 on October 17, 2008. The implementation of the Decision was deferred following the filing of a motion for reconsideration of the same.
Addressing the issues raised in the motions of intervenors and MERALCO itself, the ERC in said Order modified its Decision on MERALCO’s new rates and approved the following revised rate schedule, effective its next billing cycle:
|
Units |
ERC Approved |
Revised |
Incr./(Dec.) |
|
DISTRIBUTION |
|||||
Residential & General Service A |
|
|
|
|
|
Up to 200 kWh |
P/kWh |
0.7784 |
0.6917 |
(0.0867) |
|
201-300 kWh |
P/kWh |
1.1522 |
0.9953 |
(0.1569) |
|
301-400 kWh |
P/kWh |
1.5046 |
1.2816 |
(0.2230) |
|
401 kWh & Over |
P/kWh |
2.1186 |
1.7803 |
(0.3383) |
|
General Service B (Small NIS/IS) |
|
|
|
|
|
|
P/kW |
140.83 |
200.60 |
59.77 |
|
|
P/kWh |
0.0210 |
0.0210 |
0 |
|
General Power |
|
|
|
|
|
Secondary |
P/kW |
140.83 |
200.60 |
59.77 |
|
Below 13.2 kV |
P/kW |
139.53 |
152.60 |
13.07 |
|
13.8/13.2 kV |
P/kW |
139.53 |
152.60 |
13.07 |
|
34.5 kV |
P/kW |
139.53 |
152.60 |
13.07 |
|
115 kV & 69kV |
P/kW |
135.82 |
122.76 |
(13.06) |
|
Unit charge : General Power users |
|
|
|
|
|
Normal consumption |
P/kWh |
0.0210 |
0.0210 |
0 |
|
34.5 kV (with ODPS load) |
P/kWh |
0.4600 |
0.3860 |
(0.0780) |
|
115 kV (with ODPS load) |
P/kWh |
0.3800 |
0.3260 |
(0.0554) |
|
GHMS |
P/kWh |
0.7300 |
0.6860 |
(0.0419) |
|
Flat streetlights |
P/kWh |
2.7100 |
1.5360 |
(1.1740) |
|
125W MV or 70W HPS |
Lamp |
|
|
|
|
250W MV or 150W HPS |
Lamp |
|
|
|
|
400W MV or 250W HPS |
Lamp |
|
|
|
|
400W HPS |
Lamp |
|
|
|
|
SUPPLY |
|||||
Residential & General Service A |
|
|
|
|
|
|
P/Cust./mo |
15.80 |
15.70 |
(0.1000) |
|
|
P/kWh |
0.4765 |
0.4720 |
(0.0045) |
|
General Service B (Small NIS/IS) |
P/Cust./mo |
696.00 |
700.00 |
4.00 |
|
General Power |
|
|
|
|
|
Medium (Demand 40-200 kW) |
P/Cust./mo |
1,530.00 |
1,600.00 |
70.00 |
|
Large (demand 200-750 kW) |
P/Cust/mo. |
8,070.00 |
8,140.00 |
70.00 |
|
Very & extra large (demand >= 750 kW) |
P/Cust./mo |
13,375.00 |
13,500.00 |
125.00 |
|
GHMS |
P/Cust./mo |
279.50 |
276.80 |
(2.70) |
|
Flat streetlights |
P/kWh |
0.5812 |
0.5745 |
(0.01) |
|
125W MV or 70W HPS |
Lamp |
|
|
|
|
250W MV or 150W HPS |
Lamp |
|
|
|
|
400W MV or 250W HPS |
Lamp |
|
|
|
|
400W HPS |
Lamp |
|
|
|
|
METERING |
|||||
Residential & General Service A |
|
|
|
|
|
|
P/Cust./mo |
5.3600 |
5.3000 |
(0.0600) |
|
|
P/kWh |
0.3402 |
0.3380 |
(0.0022) |
|
General Service B (Small NIS/IS) |
P/Cust./mo |
359.00 |
360.00 |
1.00 |
|
General Power |
|
|
|
|
|
Medium (Demand 40-200 kW) |
P/Cust./mo |
823.00 |
844.20 |
21.20 |
|
Large (demand 200-750 kW) |
P/Cust./mo |
3,470.60 |
3,500.00 |
29.40 |
|
Very & extra large (demand >= 750 kW) |
P/Cust./mo |
11,941.50 |
12,000.00 |
58.50 |
|
GHMS |
P/Cust./mo |
263.75 |
261.20 |
(2.55) |
|
The ERC revised downwards its approved rates for residential users by as much as PhP0.34/kWh after considering the concerns of various sectors, particularly on the impact of the rate adjustment on the greater majority of MERALCO customers and the alleged rate distortions coming from MERALCO’s distribution costs. The ERC also set at zero (0) the income tax component of MERALCO’s rates, thereby effectively preventing it from passing this on to its customers. With this ruling, MERALCO’s approved Maximum Annual Price (MAP) for Regulatory Year 2009 was reduced to PhP1.2227/kWh, from the previously-approved unconstrained MAP of PhP1.3607 based on the Decision in ERC Cases Nos. 2008-004RC & 2008-018RC.
Also discussed and clarified in the ERC Order is new lifeline program approved for MERALCO as a consequence of the petition filed by the Department of Trade and Industry (DTI) under ERC Case No. 2008-016RC (DTI case). The ERC reiterated that customers consuming only 20 kWh and below shall continue to enjoy the 100% discount granted them and shall pay only the adjusted PhP5.30 per month metering charge, while the other lifeline customers shall enjoy a discount corresponding to the consumption level under the new lifeline program approved under the DTI case, including the PhP21.00/customer/month minimum charge.
To mitigate the impact of the rate adjustment, the ERC also decided to accelerate the CERA refund that it ordered MERALCO to implement. In its Order dated 20 April 2009 under ERC Case No. 2001-900, the ERC directed MERALCO to refund its CERA over-recoveries amounting to PhP3,924,922,762.58 at the rate of PhP0.1461/kWh, from the present rate of PhP0.0400/kWh, which it started implementing on March 2009.
The ERC adopted the PBR for distribution utilities starting in 2005 pursuant to its authority under Section 43 (f) of Republic Act No. 9136 (EPIRA) to adopt internationally accepted rate making methodologies. PBR strives to achieve a balance between efficient price levels, allowing utilities efficient revenue to ensure their sustainability, and maintaining or improving network service performance levels. It provides strong incentives to improve operational efficiencies. International experience (Australia and United Kingdom) indicates that, over time, with its built-in mechanisms for incentives and fines depending on the utilities’ performance, PBR leads to reductions in the real price of electricity distribution while improving service levels.
MERALCO entered PBR as a Group A entrant under ERC Case No. 2006-045RC.
“The changes made to the Decision on MERALCO’s PBR rates, to address the concerns and issues of intervenors, indeed show that the active participation of consumer groups and other interested parties can go a long way in the decision-making process of the ERC,” ERC Executive Director Francis Saturnino C. Juan pointed out.
April 23, 2009