The deferment of collection of generation charges worth P1.1 billion helps soften the cost of adjustment in electricity rates on consumers in the March and April billing period, the Energy Regulatory Commission (ERC) said on Wednesday.
According to the ERC, the power distributor Manila Electric Co. (Meralco) has agreed to defer the collection of the generation charges for those two months.
The ERC said the deferment will result in an increase of only P0.62 per kilowatt hour (kWh) in March and April, far less than the anticipated increase of P0.92 per kWh plus other adjustments like the value added tax and so-called systems loss.
The power distributor said it requested several of its power suppliers for a deferral of charges in their February billings to cushion the impact of the increase on its customers.
According to Meralco, the total deferred generation cost of P1.1 billion, equivalent to 40 centavos per kWh, will be collected on staggered basis in the April and May billings.
“The projected generation charge increase for March is 92 cents per kWh. Meralco, with cooperation of generation companies, will defer the equivalent of 40 cents per kWh to April and May. Thus, the generation charge increase for March will be reduced to 52 cents per kWh. If we included taxes and other charges, total increase for a residential customer will be around 62 cents per kWh in March,” said Lawrence Fernandez, Meralco vice president and head of utility economics department, in a statement.
The ERC said the deferment was discussed in a meeting on Tuesday subject to further validation by the commission for compliance with power supply agreements and substantiation of any fuel pass-through components.
The ERC said the expected increase in generation charge in its franchise area is caused by suppliers forced to use more expensive alternative fuels, and to more expensive power sold by the Wholesale Electricity Spot Market.
It said that without the staggered collection of the generation charge, a typical 200 kWh residential customer would have been charged P1.11 per kWh more when other billing components, such as systems loss and taxes, are included.
