Corporate News

Meralco to start new time-based scheme

Posted on January 23, 2013

BUSINESS customers of Manila Electric Co. (Meralco) that use at least five kilowatts (kW) a month can avail of lower rates during hours of low demand under a new scheme that starts Feb. 1, the utility said in a statement yesterday.

Meralco said its Peak/Off-Peak (POP) program, which replaces the time-of-use (ToU) and the economic zone discounted rate schemes that expired on Dec. 26 last year, had received provisional approval from the Energy Regulatory Commission (ERC).

“The timely approval of Meralco’s POP Program will provide an alternative to a significant number of Meralco’s large corporate customers who were previous availees [sic] of the NPC (National Power Corp.) ToU and the Ecozone Rate Programs…” the statement read.

It also quoted from the ERC decision concerned which said, “An initial evaluation of the instant application disclosed that Meralco’s proposed revised ToU rates will address its social commitment to its customers, especially its large industrial and commercial customers, by enticing them to invest in the country by way of just and reasonable costs of electricity.”

Meralco said in its statement that non-residential customers with at least 5 kW average monthly demand -- small- and medium-scale enterprises with such minimum demand -- will be eligible to enroll in the program.

The ERC ruling was not available and neither Meralco nor regulatory officials could be reached for details.

But a check with Meralco’s Web site showed that even residential customers may eventually be eligible for the program.

The site described the POP program as a successor of the ToU scheme and defined it as “an alternative energy pricing scheme that is based on the time of day electricity is generated and on the cost of supplying electricity at that time.”

“The Meralco POP program… specifies different pricing depending on the time of day, day of the week and season of the year,” it explained.

“Compared to standard rates, the POP program more accurately reflects the cost of electricity generation during specific… periods,” it added.

“With this pricing scheme, Meralco customers can avail of lower generation costs in their total electricity rate during pre-defined off-peak hours.”

Peak hours, when electricity is costlier, run from 8 a.m. to 9 p.m. on Monday to Saturday and from 6 p.m. to 8 p.m. on Sunday. Off-peak hours are those in the late evening to early morning outside peak hours.

Moreover, rates -- both for peak and off-peak hours -- are more expensive during the dry season in the first half than during the wet season in the second semester.

“Peak periods are hours of the day when the demand for electricity is high. Energy prices during peak periods are substantially higher than the charges during off-peak periods,” Meralco explained on its Web site.

“This is because more power plants, including those running on expensive fuels, are needed to run during the peak hours to supply and meet the demand for electricity. During off-peak or low demand, only plants running at low operating costs supply electricity.”

In its statement yesterday, Meralco said its expects customers availing of POP rates to experience up to 10% in savings compared to usage based on regular rates.

On its Web site, the utility provided a table showing that while peak rates are higher with POP than with the defunct ToU, off-peak prices are lower.

“With the POP program, affordable electricity rate options continue to be available to customers, especially to our large customers who… can help contain cost of production and remain competitive in their area of business,” Alfredo S. Panlilio, Meralco senior vice-president for Customer Retail Services, said in the statement.

Meralco grew its net income by 37% to P13.6 billion as of September last year from P10 billion in the same nine months of 2011. Its shares yesterday lost P3.80 or 1.36% to P276 apiece from P279.80 on Monday.

Beacon Electric Asset Holdings, Inc., which has the biggest stake in Meralco, is partly owned by the Philippine Long Distance Telephone Co (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a minority stake in BusinessWorld. -- C. A. M. C. Feliciano