Meralco: Electricity rates reflect 'true cost of power'

The Manila Electric Company (Meralco) on Saturday addressed mounting concerns and criticisms arising from electric bill shocks recently experienced by its customers.

“We would like to reiterate that electricity rates in the Philippines, not just Meralco’s, reflect the true cost of power as these do not have government subsidies unlike those in our neighboring countries,” Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga said in a statement.

Zaldarriaga explained that majority of the costs go to generation charges, noting that these are affected by market forces, fuel prices, actual supply conditions, and foreign exchange movements.

Nevertheless, he said the power distribution utility remains fully committed to transparency, adding that Meralco’s customer bills are “unbundled” to “clearly show where every peso goes — from generation, transmission, and system loss charges, to taxes and other government-mandated charges.”

“Most of which are pass-through costs,” the Meralco spokesperson said.

Zaldarriaga noted that Meralco’s own distribution charge “accounts for only around 12% on average of the total customer bill.”

“Meralco’s distribution rate has not increased for more than 15 years despite year on year increase in the cost of basic goods and commodities brought about by yearly inflation and continued weakening of peso against the US dollar,” he said.

“In spite of this, Meralco continued its investments in system modernization, reliability improvements, digitalization, and customer service enhancements,” he added.

The Meralco official said the power distribution utility is strongly supporting the government and the energy industry’s efforts to explore sustainable measures to lower electricity rates.

“We have always been very proactive in seeking ways to ease the burden on all power consumers and implement initiatives that mitigate increases in rates, under the leadership of DOE and guidance of the ERC,” he said.

“Meralco remains open to constructive discussions and is willing to work with government, regulators, lawmakers, and stakeholders on measures that are fair, transparent, and supported by appropriate laws and regulatory mechanisms. We support long-term solutions that prioritize energy security and continued delivery of safe, reliable and stable electricity service for the benefit of the consumers,” he added. —VAL, GMA News