Electricity rate hike due to May outage

/ 09:09 PM June 21, 2013

Consumers should brace themselves for higher electricity rates this month, a June 11, 2013 news report informed. In defense, Meralco spokespersons explained that the increases in the generation (P0.19/kWh), transmission (P0.02/kWh) and tax (P0.01/kWh) charges are a result of the massive power outage that hit Luzon in May, which forced the utility to buy from the Wholesale Electricity Spot Market (WESM).

Any rate increase is bad news and most often causes extreme consumer disgust, which is aggravated by the silence of the Energy Regulatory Commission (ERC) on the subject.


The Meralco explanation becomes more difficult to accept in light of its existing power supply contracts/agreements with power suppliers—contracts which are supposed to protect Meralco’s customers from unforeseen power supply failures or outages, like the one that hit Luzon last May 8; and from the dependence of WESM on power plants, which leads us to ask: Where will WESM get the power to trade or sell whenever most plants in Luzon are down?

Instead of Meralco finding ways to protect its millions of customers, it justifies the increase, saying that the generation and transmission costs are simply pass-on charges.


However, knowing the truth behind the announced rate increase will help appease consumers’ deeply ingrained dissatisfaction with Meralco. So let Meralco’s electricity rates, which are posted on its website, do the talking.

A look at their link “electricity rate tables” would show Meralco’s monthly transactions, from February 3013 to May 2013 as follows:

Those covered by Power Supply Contracts/Agreements with (1) SEM-Calaca Power Corp., (2) Masinloc Power Partners Corp., (3) Therma Luzon Inc., (4) San Miguel Energy Corp., (5) South Premier Power Corp.; and

Those covered by Power Purchase Agreements with (1) Quezon Power Phil. Ltd., (2) FGPC-Sta. Rita, (3) FGPC-San Lorenzo.

The table further shows that Meralco has also been sourcing from WESM 6.7 percent to 10.5 percent of its power supply requirement last May.

But interestingly, the average generation charge of Meralco has been steadily increasing—from  P5.0953/kWh in March to P5.3495/kWh in April, to P5.4225/kWh in May, and to P5.6017/kWh this June. Similarly for the same period, WESM’s costs to Meralco were P12.7264/kWh, P13.1778/kWh, P13.2573/kWh, and P13.4949/kWh.

Consumers now ask: Why the monthly increases in the generation charge when there were no power outages in February, March and April 2013? And why the silence of the ERC, the Joint Congressional Power Commission, and Malacañang on the issue of rate increases? To whom can consumers turn to? On this issue, where is public service from our public servants?


Oh, may the Lord Almighty intercede in behalf of the power consumers!

—PETE L. ILAGAN, president,

National Association of Electricity

Consumers for Reforms Inc.,

[email protected]

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TAGS: Electricity Rates, letters, Meralco, power outage
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