Change in Meralco meter system to cause minimal power rate hike

By Lenie Lectura – March 4, 2019
from Business Mirror

A PLAN to modernize the metering system of the Manila Electric Co. (Meralco) will result in an increase in power rates by only a few centavos and not P0.23 to as much as P0.39 per kilowatt hour (kWh).

Meralco Senior Vice President Alfredo Panlilio said the utility firm would seek a meeting with the Energy Regulatory Commission (ERC) to clarify the numbers.

The ERC is currently evaluating Meralco’s pending Advanced Metering Infrastructure (AMI) application. Based on initial review, the commission said an average rate adjustment of P0.2309/kWh will be added to the customers’ electric bill if the smart meters will be shared by all Meralco customers, while an average rate adjustment of P0.3972/kWh if charged only to Meralco bulk customers.

When sought for comment, Panlilio said there would be a rate increase “but not the rate as mentioned by the ERC.”

“It’s too much. I think we have to sit down with them. It’s much, much lower than that. I actually don’t know where that number came from, what’s the basis. We’re looking at a few cents. When we presented, it was 4 cents to 5 cents,” Panlilio said.

Panlilio said Meralco wants to present the benefits to the commission, as well as AMI’s corresponding rate adjustment. “What we plan to do with Attorney Vallez is to sit down with ERC Chairman Agnes Devanadera again, show her the business case we showed in the past. It’s really about clarifying what the business case is all about.”

He said the basis for any rate adjustment in relation to the rollout of the smart meters is the cost of the meter itself.

“At the end of it, the basis is higher meter prices, that was about $98 per meter. But meters now are down, lower, at the $75 level. But the number I gave you can be lower. What we are trying to do is make the meter agnostic. We’re redesigning the network as meter agnostic and we can hopefully bring down te meter prices further,” the Meralco official said.

AMI is an integrated system of smart meters, communication networks and data management systems that enables two-way communication between utilities and customers.

The smart meters can handle prepaid and postpaid electricity services. Subscribers with smart meters can manage their electricity usage and budget through consumption information, alerts and notifications.

Meralco registered 6.5 million customers.  The company is targeting to have 3 million of its customers shift to smart meters four years from now.

“We welcome these state-of-the-art technologies that will help consumers manage their electricity consumption. However, we must see to it that the installation of AMI should not adversely affect the consumers in terms of paying higher electricity rates,” Devanadera said.

Meralco filed its application for approval of its AMI project with the ERC in March 2017 in accordance with the “Rules to Govern the Implementation of AMI by Distribution Utilities and other ERC-Authorized Entities.”  The pending application involves 1 million smart meters.

Consumer group Laban Konsyumer Inc. proposed that Meralco shoulder the cost. “Unless Meralco agrees to shoulder it and not pass it on to consumers, then that’s okay. The timing is not good. Electricity rates are high and summer is already here which means power rates are likely to go up,” LKI President Victor Dimagiba said.