Power bills up P55.24 in May

HOUSEHOLDS in Metro Manila with a monthly consumption of 200 kilowatt-hours could expect an increase of P55.24 in their power bills by May.

This, after the Energy Regulatory Commission (ERC) allowed the National Power Corp. (Napocor) to collect P0.6904/kWh from consumers in Luzon, P0.6060/kWh in the Visayas, and P0.0442/kWh in Mindanao to recover its expenses on fuel, purchased power and foreign  exchange from January 2007 up to April 2010. These adjustments are being made through Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustment (Icera) Mechanism.

Lawrence Fernandez, Meralco utility economics head told the BusinessMirror that households could expect the GRAM and Icera adjustment to be diluted to only P0.2762/kWh since Meralco only gets an average of 40 percent of its requirements from Napocor.

He said a household consuming 200 kWh a month will have an increase of P55.24 in its power bills.  Explaining this, Fernandez said 40 percent of P0.6904/kWh is P0.2762/kWh and when multiplied with 200 kWh is equivalent to P55.24.

The ERC said the GRAM and Icera rate adjustments will be reflected in consumers’ bills by May as the adjustments will take effect on the March 26-April 25, 2012, billing period.

The ERC added that the rate recovery mechanisms are valid until the deferred accounting adjustment (DAA) amounts approved by the ERC will be fully recovered. 
Lawyer Francis Saturnino Juan, ERC executive director, said these fuel, purchased power, and foreign-currency costs are legitimate and already incurred by Napocor and PSALM in their supply of power to their various customers.

Juan added that Napocor and PSALM are entitled to recover these costs as part of the price of the electricity they sell to their customers.

“The ERC has already mitigated the impact of these adjustments by spreading their recovery over a longer period and by coming out with this decision at the soonest to avoid additional carrying charges to be included in the recoverable amounts,” Juan said.

The GRAM DAA covers the difference between the allowable fuel and purchased-power costs and the amounts recovered through the approved basic-generated rate during the test period and the balance of previously approved GRAM applications of Napocor and PSALM.

The Icera DAA, on the other hand, corresponds to the additional costs or savings from foreign-exchange fluctuations in the settlement of debt service and operating expenses and covers the difference between the actual or allowable capacity and infrastructure fees for Build-Operate-Transfer plants and the billed amounts under the basic generation charge, including the corresponding carrying charge for the test period for the Luzon, the Visayas and the Mindanao grids. –Paul Anthony A. Isla / Reporter, Manila Standard Today