Electricity bills lower in MayDate Published: May 09, 2013
Power users will see an over-all 12-centavo per kilowatthour (kWh) decrease in the May billing month, as reductions in the transmission and other components of the electric bill offset a higher generation charge. A typical household using 200 kWh will experience a reduction of P24 in his May electric bill.
Transmission and other charges post 20 centavo reduction
The transmission charge registered the biggest decrease at around 12 centavos per kWh, mainly due to lower ancillary service charges from the National Grid Corporation of the Philippines (NGCP).
Other bill components that registered reductions include the system loss charge, lifeline rate subsidy, the VAT and local franchise tax, which had a cumulative reduction of 8 centavos per kWh.
Generation costs increase as power demand surges
The generation charge registered an upward adjustment of 8 centavos per kWh to P5.47 per kWh. Still, this is 13 centavos lower than the generation charge in May 2012.
With the onset of summer, demand for power climbed to record levels in the April supply month. Peak demand in Luzon hit 8,221 megawatts (MW), overtaking the 7,898 MW recorded in 2012. Similarly, peak demand in the Meralco service area set a new record of 5,829 MW in April, versus 2012's 5,633 MW.
As a result, Meralco had to obtain more supply from the Wholesale Electricity Spot Market (WESM) to supplement its sourcing from the Power Supply Agreements (PSAs), Independent Power Producers (IPPs), and the National Power Corporation (NPC).
Though the generation cost of the PSAs slightly went up from P4.24 to P4.34 per kWh, it still remained the lowest cost of supply among the power suppliers. Rates of the IPPs, meanwhile, decreased by 17 centavos per kWh to P4.90 per kWh. The PSAs and IPPs accounted for 51% and 37%, respectively, of Meralco's total energy requirement in April.
The remaining 12% was sourced from NPC, the WESM, and other small generators. NPC’s effective rate to Meralco went down by 23 centavos to P9.65 per kWh. This includes the P714 million per month being collected for GRAM and ICERA. Finally, WESM purchases registered a rate of P17.15 per kWh, inclusive of adjustments and line rental charges for bilateral contract quantities
Pass through charges and nothing for Meralco
Meralco reiterated that it does not earn from these pass-through charges, the largest of which is the generation charge. Payment for the generation charge goes to the power suppliers such as the IPPs, plants selling to Meralco under the PSAs, NPC and WESM. The rest of the pass-through costs include transmission, taxes, universal charges, and other charges. Meralco's distribution, supply, and metering charges account for only about 18 percent on the average of the total electricity bill.
Meralco releases Notice of AGMDate Published: April 26, 2013
Notice of Annual Shareholders' Meeting
Meralco released its Notice of Annual Shareholders General Meeting (AGM) on April 26, 2013, 32 days prior to the date of AGM on May 28, 2013 and will be held at the Meralco Theater, Ortigas Avenue, Pasig City at 10:00 AM.
To facilitate shareholder attendance, the notice of AGM is written in the English language, containing the date, location and agenda of the AGM. It also has full and timely information regarding the issues to be decided on at the meeting, with details and rationale. Each resolution proposed for shareholder vote is included on the notice to give shareholders sufficient and adequate information. Each resolution deals with only one item.
The notice of AGM has the following details: rules, voting procedures, profiles of directors (age, qualification, date of first appointment, experience, and directorships in other listed companies) seeking re-election, auditors seeking appointment/re-appointment, an explanation of the dividend policy, and the amount payable for final dividends.
To further assist shareholders, proxy documents were also provided together with this notice.
MERALCO recognizes the rights of shareholders to participate effectively and vote on major corporate governance decisions in general shareholder meetings.
The Discipline of Ethics and ComplianceDate Published: April 26, 2013
Meralco and other PLCs attend an Integrity Initiative Forum
Corporate Governance Office (CGO) and HR personnel of different publicly-listed companies (PLCs) attended a forum with the theme: “The Discipline of Ethics and Compliance” on April 23, 2013 at the AIM Conference Center in Makati City. The speakers during the forum were PSE’s Vice President for Governance, Risk and Compliance Atty. Argel Astudillo, SMART’s CGO Head Atty. Elmer D. Nitura, and the Good Governance Advocates and Practitioners of the Philippines (GGAPP) President as well as PLDT’s CG Education Head Atty. Blue Festin.
Atty. Astudillo discussed the importance, regulatory basis and trends of Corporate Compliance Programs and a designated Compliance Officer to manage such. He emphasized that non-compliant corporations, aside from paying monetary penalty, risk their corporate image, credibility to shareholders and other stakeholders, and even the continuity of their business operations locally or internationally.
Atty. Nitura discussed that Corporate Governance, Ethics and Compliance Program is never a destination, but an on-going journey. He discussed PLDT’s unified CG Ethics and Compliance Program, Structure and Process Flow according to the stringent laws and policies enforced by international regulatory agencies governing their group, namely: the NYSE, SEC and PSE. Atty. Nitura stressed that in order for CG policies to have value, they are to be embedded in and supported by the company’s business units.
Atty. Festin’s talk focused on the vision, mission and advocacies of GGAPP. GGAPP is a non-stock, non-profit organization, currently composed of CGO executives and personnel representing 40 Philippine companies from various fields of business and expertise unified by their corporate governance principles and their philosophy that better professionals yield better companies and ultimately, better businesses.
The forum is twelfth in a series of events and workshops organized by Integrity Initiative to promote ethics, integrity, compliance, and good governance, and to continuously educate the private sector in these areas. The Integrity Initiative is a private sector-led campaign organized by the Makati Business Club (MBC), European Chamber of Commerce of the Philippines (ECCP), Management Association of the Philippines (MAP), and American Chamber of Commerce of the Philippines (AMCHAM).
A hundred participants were in attendance to the forum. They were from the government and renowned PLCs like MPIC, PLDT, EDC, SMIC and Meralco.
Bringing God back to the Board RoomDate Published: April 26, 2013
Meralco and other PLCs attend a Breakfast Roundtable organized by ICD
Corporate Governance Office (CGO) personnel of different publicly-listed companies (PLCs) attended a breakfast roundtable with the theme: “Bringing God back to the Board Room” on April 25, 2013 at the Manila Golf and Country Club, Forbes Park in Makati City. The speaker is His Eminence Luis Antonio Cardinal Tagle, who discussed the importance of corporate governance founded on biblical principles and standards.
The Institute of Corporate Directors (ICD), which organized the event, is an organization of corporate directors and reputational agents spearheading corporate governance efforts in the Philippines. ICD leads corporate governance orientations, governance scorecard assessments and working sessions, to get directors and management engaged in corporate work, motivated by good governance principles and practices.
Meralco’s Senior Vice President and Head of Human Resources Mr. Ramon B. Segismundo, First Vice President and Head of Corporate Audits Ms. Helen T. de Guzman, Vice President and Deputy Head of CGO Mr. Gerardo F. dela Paz and Corporate Governance Officer Ms. Lilian P. Umipig were in attendance to the breakfast roundtable.
After two months of reductions, generation charge adjusts in AprilDate Published: April 10, 2013
Customers advised to observe energy efficiency measures this summer
After a cumulative reduction of 60 centavos over the past two months, the generation charge for the month of April will go up by 20 centavos per kilowatthour (kWh). Despite the increase, this month’s generation charge at P5.39 per kWh is still 40 centavos lower than the January 2013 level of P5.79 per kWh, reflective of costs in December 2012 prior to the effectivity of the Power Supply Agreements (PSAs).
The increase this April followed a 55-centavo per kWh increase in the combined cost of power purchased from the National Power Corporation (NPC), the Wholesale Electricity Spot Market (WESM) and others. With the onset of summer, Meralco noted a 5-percent increase in daily electricity usage in March compared to February, and electricity sourced from the WESM more than doubled from 1.3% to 2.9% of total requirements. Some power plants likewise underwent maintenance shutdown in March, necessitating the additional power obtained from WESM.
Rates of the Independent Power Producers (IPPs) and the Power Supply Agreements (PSAs), meanwhile, went up by 8 and 2 centavos per kWh, respectively. This was mainly due to slightly higher coal prices and a depreciation of the Peso against the US Dollar.
Meralco's PSAs still lowest source of supply
Of these suppliers, the PSAs remained to offer the lowest rates, at P4.24 per kWh for the supply month of March. So far, it has registered a year-to-date average rate of P4.29 per kWh, P1.22 per kWh lower than the last NPC TSC rate of P5.51 per kWh reflected in the December 2012 supply month. PSAs registered rates of P4.41 and P4.22 per kWh in the January and February supply months, respectively.
It was also noted that with the significantly reduced purchase from NPC, the collection of the GRAM and ICERA which pertains to NPC’s costs in prior periods have jacked up the average rate of NPC-supplied power to P9.89 per kWh last month. Meanwhile, the effective rate from WESM which includes line rentals and must-run and other adjustments, stood at P19.92 per kWh.
In terms of contribution to Meralco's total supply requirements for the March supply month, PSAs, IPPs, and the others (i.e. NPC and WESM) had shares of 51, 39 and 10 percent, respectively.
Increases in other bill components
Other bill components likewise registered increases. The transmission charge and other charges increased by 1 and 6 centavos per kWh, respectively. Adding these to the generation charge adjustment, an average residential customer with 200-kWh monthly consumption will experience a 27-centavo increase per kWh in his April electricity bill.
Given that consumers' electricity consumption historically rise during the summer months, Meralco likewise reminded its customers to observe energy efficiency tips. Customers may visit Meralco's website at www.meralco.com.ph for said tips.
Completely pass through and nothing for Meralco
Meralco reiterated that it does not earn from these pass-through charges, the largest of which is the generation charge. Payment for the generation charge goes to the power suppliers such as the IPPs, plants selling to Meralco under the PSAs, NPC and WESM. The rest of the pass-through costs include transmission, taxes, universal charges, and other charges. Meralco's distribution, supply, and metering charges account for only about 18 percent on the average of the total electricity bill.
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