Philippines' energy commission approves Meralco application for lower interim rate

Providing that the company will not overcollect.

The Energy Regulatory Commission (ERC) recently granted Meralco's application for provisional authority to implement lower distribution, supply and metering charges.

According to a research note from Maybank ATR Kim Eng, this involves the following: distribution charge at PHP1.0114/kWh, supply charge at PHP0.2251/kWh, metering charge at PHP0.1444/kWh for a total of PHP1.3810/kWh which is 11.26% lower than the current average rate of Meralco at PHP1.5562/kWh.

In its application for approval of the interim average rate of PHP1.3939/kWh, MER proposed to reduce its current rate by removing the component representing its under-recoveries in the distribution charge for the second regulatory period (Jul 2007 to Jun 2011).

Here's more from Maybank ATR Kim Eng:

The ERC made a further reduction of PHP0.0129/kWh to remove the allowance for net efficiency, which was embedded in its rates for the third regulatory period (Jul 2011 to Jun 2015), and provisionally allowed the implementation of the interim average rate of PhP1.3810/kWh, subject to its final decision after hearings are concluded.

The ERC has ensured MER will not over-collect from customers for its previous under-recoveries and allowed net efficiency adjustments, while the ERC determines what Meralco's appropriate rate should be starting the July 2015 billing period.