Beating Meralco In The Rate Hike Game

An unprecedented power rate hike due to higher generation charge is scheduled to be collected by Manila Electric Company (Meralco) this month of December, 2013. The power rate increase was caused by the maintenance shutdown of the Malampaya facility from November 11 to December 10, 2013. Malampaya supplies the fuel to three (3) natural gas-fired power plants with a total capacity of 2,700 megawatts (MW) that constitutes 40% of the electricity needs of Luzon.

Because of the Malampaya shutdown, Meralco was obliged to buy the electric power that it distributed during the period at much higher cost and this caused a total rate hike of PhP4.16 per kilowatt-hour (Kw-Hr) to its consumers. After a series of protests and discussions, the Energy Regulatory Commission (ERC) approved Meralco’s plan to implement the increase in its generation charge on staggered basis. According to ERC approval, the electricity rate will jump by P2.41/Kw-Hr  in December 2013, P1.21/Kw-Hr in February 2014 and P0.54/Kw-Hr in March 2014.

ERC had an explanation which I cannot comprehend on why Meralco has to skip January 2014 in its collection of the increase in the generation charge. It leaves me wondering if our January bill will contain any increase or will the generation charge rolls back to November 2014 level. Whatever it will be, what we need to think about now is how to beat the rate hike in our February and March Meralco bills. Our December bill will come in anytime now so it seems there is no way we can do but pay the PhP2.41/Kw-Hr increase in it.

As an ordinary power consumer, I am thinking of a way by which Meralco will be made to share part of the increased generation charges that it will collect from us. With the approved staggered payments as basis and reduced power consumption as sure way to cushion the increase, here’s how my analysis and computation goes:

A) My household’s average monthly power consumption for the past twelve (12) months was 365 Kw-Hrs so if our December bill will be the average and the whole PhP4.16/Kw-Hr rate hike will be charged this month, Meralco will collect from us PhP1,518.40 for the increased generation charge.

B) If I apply the approved PhP2.41/Kw-Hr rate hike for December, Meralco’s collection of the increase in the generation charge will be PhP879.65 only.

C) I checked our lowest monthly power consumption and it turned out to be 292 Kw-Hrs. If we could reduce our consumption to this figure, then Meralco’s collection of the rate hike for the months of February and March 2014 will only be as follows:

1. For February 2014, I will pay PhP1.21/Kw-Hr x 292 Kw-Hr or PhP353.22 only.

2. For March 2014, Meralco’s collection of the increase in the generation charge from me will be PhP0.54/Kw-Hr x 292 Kw-Hr or PhP157.68 only.

In summary, one-time, big-time collection of rate hike will cost me PhP1,518.40 while the approved staggered payments will total to PhP1,390.55 (PhP879.65 + 353.22 + 157.68) only. The difference of PhP127.85 is small but if we consider that Meralco is serving more than one (1M) million consumers and if majority will save on their power consumption, the end result could somehow make the monopoly pay its share of the burden. The bottomline, however, is that we should conserve energy to have lesser bills to pay.