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    Meralco answers FDC, explains
    company-related charges
     
    By Paul Anthony Isla
    Reporter
     

    MANILA Electric Co. (Meralco), the country’s largest power distributor, said that the Freedom from Debt Coalition’s (FDC) statement that Meralco rates are the highest in the country and that its distribution charges apply only to its residential and general service (RGS) customers that consume more than 400 kilowatt-hours (kWh) per month.

    In a statement, Meralco said that these customers comprise less than 10 percent of Meralco’s total customer base.  

    “It is unfortunate that the FDC, in its haste, based its conclusion on the bills of high-consuming residential customers whose distribution charge is P1.6615 per kWh. Almost 70 percent of all RGS customers, or close to three million, pay only one-third of that at a distribution charge of P0.5729 a kWh,” said Elpi Cuna, Meralco vice president for corporate communications.

    In the unbundled rates approved by the Energy Regulatory Commission in 2003, Cuna said the distribution charge to RGS customers vary.

    For the three million, or 69 percent, consuming not more than 200 kWh, the distribution charge is P0.5729 a kWh; those consuming from 201 kWh to 300 kWh, or some 600,000 customers, are charged P0.8765 a kWh; those whose consumptions fall within 301 kWh to 400 kWh, or 7 percent of Meralco total customers, pay P1.1628 a kWh; and only those consuming beyond 400 kWh pay P1.6615 per kilowatt hour.

    “The FDC should have been more thorough in its study in order to avoid misleading the people. It seems that its members are in the high-consuming range, certainly not representative of the low-consuming residential customers that comprise the broad majority of Meralco customers,” said Cuna.

    For commercial and industrial customers, Cuna said that the combined Meralco charges, consisting of distribution, supply and metering, on the average was only P0.6858 a kWh and P0.3198 a kWh, respectively, in June this year.

    He added that this translates to 8.6 percent of the average commercial bill, and 4.6 percent for the industrial customers.

    Cuna said that total Meralco charges comprised only 12.45 percent of the average unbundled bill in June 2007, while the remaining 87.55 percent is for collection of pass-through charges (generation, transmission, system loss), cross-subsidies, universal charges and taxes.

    “It is critical in the power-delivery supply chain that the utility provides value for what its customers pay. We are very concerned with our ability to deliver the level of service expected of us,” Cuna said.

    While Meralco agrees with the FDC’s argument on customer density, Cuna stressed that around 70 percent of the company’s franchise and service area are actually in the rural regions, and that a significant portion of these areas, particularly those in the provinces, are characterized by low customer densities.

    “So to compare our area with Metro Cebu and Davao City as a whole is unfair and misleading. It is like comparing apples with oranges,” he added.

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