MANILA, Philippines – Electricity rates will be four centavos lower per kilowatt-hour beginning next month as the Manila Electric Co. (Meralco) implements a P3.9-billion refund on currency exchange rate adjustment or CERA as ordered by the Energy Regulatory Commission (ERC).
CERA is intended to ease the effect of foreign exchange fluctuations on the debt servicing of Meralco and other utilities.
The refund was initially supposed to be reflected in the November billing of Meralco customers. But Meralco filed a motion to defer the CERA refund, saying that it had no capability to fulfill the requirement.
“The commission deems it reasonable to recalculate the amount and the period of CERA refund in order to cushion its impact on Meralco’s financial viability,” ERC said in its order.
In a five-page order, ERC said the four-centavo refund will be implemented until the full amount has been refunded.
Meralco president Jose “Ping” de Jesus said at a press briefing yesterday that the firm is now in a position to make the refund since it would be done on a staggered basis.
Ivanna dela Pena, Meralco utility economics head, said it might take them about three years to complete the refund.
The ERC earlier asked Meralco to set the refund at 14.16 centavos per kwh for a period of 12 months.
De Jesus, who assumed office only last Feb. 1, said bringing down rates is one of his biggest challenges.
“So to put it in very ambitious terms – we will do our best to try to lower power costs to the extent we can. Although we know we have very limited ability to do that,” De Jesus said.
The Meralco chief said the entry of new investors in the power utility firm would help him achieve his objective.
He said Meralco is “in complete synch and perfectly aligned” with its new partner San Miguel Corp.
“I have had a conversation with them. And they have the same objectives to see Meralco improve its image and see power costs go down,” he said.
“In fact, you’ve heard Mr. (Ramon) Ang say that. We have discussed that in the Board and that’s been a constant preoccupation – combine all your sources so that you get the least generation cost for the customer,” he said.
“Although none of that goes to us because if you look at your bill the only constant thing there is your distribution cost, which has not moved since 2003,” he added.
Asked what measures are being eyed to lower power rates, De Jesus said they are looking at various ways.
“The discussion is to get the cheapest source of energy. If we, during peak, get our power from nearby plants (hydro) that’s cheaper than oil-based power peaking plants –and if it is within our franchise area –you don’t have to pay an additional cost for transmission,” he said. “So all of the benefits from that go to the consumer and we don’t benefit from that,” he said.
By Donnabelle Gatdula
Updated February 25, 2009 12:00 AM