News Updates

Power rates up this AprilDate Published: April 11, 2014


As Wholesale Electricity Spot Market prices registered significant increase

After two consecutive months of reduction in electricity rates, consumers will see an 89-centavo per kilowatthour (kWh) increase in their April rates, as the generation charge or the cost of power sold by power producers to distribution utilities, along with other components of the electricity bill, registered upward adjustments.

Primary reason for the increase in the generation charge was the tight supply condition brought about by the outage of several large power plants, coupled with an increase in demand. Demand last March increased by 200 MW, or roughly equivalent to the consumption of 10 large malls.

Power producers’ generation charge increase

The increase was mainly due to a PhP 0.69 per kWh increase in the generation charge or cost of producing power, from PhP 5.21 per kWh in March to PhP 5.90 per kWh this month. The increase was primarily driven by the significant spike in the Wholesale Electricity Spot Market (WESM) prices to PhP 21.59 per kWh during the March supply month from PhP 4.90 per kWh the previous month, for an increase of PhP 16.69 per kWh. Though demand for the March supply month increased, Meralco only obtained about 4 percent of its power requirements from WESM. With Meralco’s purchase from the WESM the previous month being at around the same level, WESM rates, therefore, increased because of higher prices at the market.

Shown below is a list of the power plants that had outages, which affected the April generation charge.

Scheduled Maintenance Shutdown
Power Plant Operated By
GN Power-1 GN Power Ltd. Co.
Calaca-2 SEM-Calaca Power Corp.
Sta. Rita Unit 40 First Gas Power Corp.
Masinloc-1 Masinloc Power Partners Co., Ltd
Ilijan-1 South Premiere Power Corp.

Emergency Shutdown
Power Plant Operated By
Sta. Rita Unit 20 First Gas Power Corp.
Calaca-1 SEM-Calaca Power Corp.
Masinloc-2 Masinloc Power Partners Co., Ltd.
GN Power-2 GN Power Ltd.

Limited Capacity
Power Plant Operated By
Sual-2 San Miguel Energy
Malaya-1 Power Sector Assets and Liabilities Management (PSALM).

A PhP 0.20 per kWh increase in the average cost of power sourced from the Power Supply Agreements (PSAs) was mostly offset by a PhP 0.19 per kWh reduction in the rates of the Independent Power Producers (IPPs). PSAs increased from PhP 4.57 per kWh to 4.77 per kWh, while IPP rates went down from PhP 5.63 per kWh to PhP 5.44 per kWh. In terms of share to Meralco’s total power requirements, PSAs and IPPs accounted for 51 and 45 percent, respectively. Meralco’s PSAs remained the lowest cost source of supply.

Adjustment in other bill components

Besides the increase in the generation charge, transmission charge and taxes also went up by PhP 0.03 and PhP 0.11 per kWh, respectively. Transmission charge increased mostly due to the increase in ancillary charges. Slight increase in power delivery service also contributed to the increase in transmission cost. These increases in the generation and transmission charges impacted on taxes, as these charges are factored in the computation of taxes.

System loss charge also registered an increase of PhP 0.06 per kWh. This was due to the increase in the average cost of power (generation and transmission) used in pricing the system loss volume. Further increase in the system loss, however, was mitigated by the reduction in the 12-month moving system loss from 6.66% last month to 6.59% in the April billing.

The distribution charge has not changed since July 2013.

Measures to address tight power supply

Given that a number of power plants are still scheduled to go on maintenance shutdown in the coming months and that demand for power is expected to still be high for the remainder of the summer season, Meralco is taking proactive steps to help mitigate the possible impact of the tight power supply situation. Meralco recently signed Interim Power Supply Agreements (IPSAs) with various power suppliers to address this supply situation and lessen exposure to the WESM during this period.

Included in the IPSAs was Meralco’s contract with 1590 Energy Corporation for the purchase of up to 140 MW capacity of 1590’s Bauang Power Plant. Meralco also signed an agreement with Global Business Power (GBP) for the purchase of up to 64 MW capacity output from GBP’s Toledo Power Co. and Panay Power Corporation, both of which started supplying to Meralco last April 3.

In a related development, Therma Mobile, Inc. (TMO) is currently supplying 150 MW to Meralco. This will increase to 200 MW starting April 15 and will go up to 234 MW by end of the month.

Energy efficiency

Meralco is also constantly reminding its customers to observe energy efficiency practices to help manage their consumption, and hence their electricity-related expenses, especially during the summer months. Some examples are turning off lights and unplugging appliances when not in use. Also, it is important to make sure that appliances, particularly cooling devices like refrigerators, electric fans and air-conditioning units are in tip-top condition.

For more tips, customers may visit the Meralco website at www.meralco.com.ph.

Completely pass through

Meralco reiterated that it does not earn from the pass-through charges, such as the generation charge, which is the single largest component of the electricity bill. Payment for it goes to the power suppliers such as the plants selling to Meralco through the WESM and under the PSAs, as well as the IPPs. Meralco’s distribution, supply, and metering charges account for only about 18% on the average of the total electricity bill.


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Meralco, one of 4 High-scoring Philippine Listed Companies in the 2013 ASEAN Corporate Governance Scorecard (ACGS)Date Published: April 11, 2014


In 2013, Meralco scored significantly high in the ACGS and was among the Top 4 publicly-listed companies (PLCs) in the country.

The ACGS assesses the corporate governance practices of publicly-listed companies (PLCs) of member countries, including the Philippines, using a common assessment instrument. The ACGS 2013 results for Meralco were disclosed by the Institute of Corporate Directors (ICD) during the ACGS Orientation attended by Meralco’s directors and key officers on March 31. ICD also presented the Company’s strengths and areas for improvement in time for the 2015 ranking of all publicly listed companies in the ASEAN region, as part of the integration initiatives of the ASEAN economic community.

Among Meralco’s highlighted strengths were on the categories: Rights and Equitable Treatment of Shareholders and on the Role of its Stakeholders, for providing at least 28 days’ notice for all resolutions, disclosing voting results and providing rationale and explanation for each agenda item, requiring directors to report their dealings in company shares within three business days, having a separate corporate social responsibility report, disclosing the details of training and development programs for employees, having procedures for complaints by employees concerning illegal and unethical behaviour, and disclosing that related-party transactions (RPTs) were conducted in a “fair and at arm’s length” way.

Under the Disclosure and Transparency category, ICD highlighted the Company’s strength in disclosing its policy covering the review and approval of significant RPTs, using analysts and media briefings as modes of communication, and having a policy covering the review and approval of significant RPTs.

In the category on Responsibilities of the Board, the Company’s charters on Board and Committee responsibilities, Code of Ethics, policies and process followed in appointing new directors, and the performance assessment process and criteria for the Board, Committees, and CEO were given merit.

Smiling all the way to Bayad CenterDate Published: March 28, 2014




Meralco Key Officers Attend GGAPP Forum on Good Governance ReformsDate Published: March 20, 2014


Key officers of the Company attended a Forum entitled, “Converging Lights on Good Governance Reforms” on March 17, 2014 at the Hotel Intercontinental in Makati City. The speakers were His Eminence Luis Antonio Cardinal Tagle, Mr. Guillermo "Bill" Luz of the Philippine National Competitiveness Council and Hon. Maria Leonor "Leni" Robredo of Camarines Sur's 3rd District.

Cardinal Tagle stressed that an individual’s moral values are closely tied with the success of good corporate or public governance. Mr. Bill Luz discussed the vital role of cooperative partnerships between the private and the public sector in steering competitiveness of the Philippines in the imminent ASEAN financial integration. Hon. Leni Robredo emphasized that investors and businesses favor an open, transparent and business friendly local government that balances needs of society with those of various sectors.

The Company's key officers and employees who attended the forum were: Antonio M. Abuel, Jr., Ireneo B. Acuña, Angelito D. Bermudo, Gerardo F. dela Paz, Ferdinand O. Geluz, Victor S. Genuino, Nixon G. Hao, Jose Rainier A. Reyes, Nestor P. Sarmiento, Manuel Lorenzo L. Tuason, Ferdinand T. Salvosa, Jeffrey John dela Cerna, Atty. Maria Zarah R. Villanueva-Castro, Lilian P. Umipig, Lauro G. Francisco, Lourdes Mary Margaret Y. Ramos and Ma. Lair E. Ambrocio.

The Good Governance Advocates and Practitioners of the Philippines (GGAPP) spearheaded the Forum, which is the third in their yearly series. GGAPP is an association of professionals from various publicly listed companies, the public sector and other organizations, who share the common objectives of promoting a culture of good governance, contributing in raising standards of governance, advancing governance awareness and study, and developing proficiency in governance among advocates and practitioners.


Meralco rates to go down for second straight month this MarchDate Published: March 11, 2014


Electricity consumers will see a 45-centavo per kilowatthour (kWh) reduction in their March rates, as the generation charge along with other components of the electricity bill registered downward adjustments. The bill of a typical household using 200 kWh will decrease by around PhP 90 this month.

Generation costs decrease

The reduction was mainly due to a 33-centavo per kWh decrease in the Generation Charge, from PhP 5.54 per kWh last February to PhP 5.21 per kWh this month. This is the second straight month that the generation charge registered a reduction, with generation costs from all major sources of supply going down.

The decrease in generation charge was primarily driven by reductions in the cost of power sourced from plants selling to Meralco under Power Supply Agreements (PSAs). Average cost of power under the PSAs decreased by 25 centavos per kWh from PhP 4.81 per kWh to PhP 4.57 per kWh. Meralco’s PSAs, which supplied 53% of Meralco’s requirements, remained the lowest cost source of supply.

The Independent Power Producers (IPPs) also registered a reduction of 36 centavos per kWh. From the previous month’s level of PhP 5.99 per kWh, IPP rates went down to PhP 5.63 per kWh this month. The IPPs’ share to Meralco’s total power requirements for the supply month of February was 43%.

While cost of power sourced from the Wholesale Electric Spot Market (WESM) posted the largest reduction at 51-centavo per kWh, purchases from the WESM accounted for only 4% of Meralco’s requirements. From PhP 5.41 per kWh during the January supply month, WESM charges went down to PhP 4.90 per kWh in February, as demand remained moderate and no major power plant outages were reported.

Contributing to the lower generation charge, too, was the strengthening of the peso during the February supply month.

Adjustment in other bill components

Besides the reduction in the generation charge, other bill components, which include subsidy, system loss charge and universal charges, also registered a reduction of 11 centavos per kWh.

Meanwhile, an increase of 4 centavos per kWh in the transmission charge was offset by a 5-centavo per kWh reduction in taxes, consisting of the value added tax (VAT) and local franchise tax (LFT).

The distribution charge remains unchanged.

Completely pass through

Meralco reiterated that it does not earn from the pass-through charges, such as the generation charge, which is the single largest component of the electricity bill. Payment for it goes to the power suppliers such as the IPPs, plants selling to Meralco under the PSAs and the WESM. Meralco’s distribution, supply, and metering charges account for only about 18 percent on the average of the total electricity bill.

Call for Energy Efficiency

With the summer months approaching, Meralco is advising its customers to manage their electricity consumption. Meralco said that appliances should be in tip-top condition so as to maximize their reliability and efficiency. For other energy efficiency tips, customers may visit Meralco’s website at www.meralco.com.ph.


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