The Manila Electric Corp. (Meralco) has decided to defer its planned application for a P0.30 per kilowatthour (Kwh) rate hike.
Meralco corporate communications director Elpi O. Cuna said the board decided to heed the call of President Estrada not to seek a rate hike for the moment.
"The board has taken into consideration the President's appeal for a deferment of the proposed rate hike," Cuna said.
However, this is only for the moment, he said, adding that Meralco will sooner or later file for a rate hike with the Energy Regulatory Board (ERB).
"We will hold off the proposed rate hike for a month or so. But it is inevitable (rate increase)," he said.
Late last year and early this year, the utilities company announced that it would seek P0.30 rate hike in its basic electricity rate.
The planned rate increase will mean that the residential customers will have to pay a basic rate of P1.42 per Kwh, P0.80 for industrial, and P1.15 for commercial customers. It will be divided out in two phases, P0.15 in April and the other half in June.
The principal reason for the rate increase is that they have to achieve a return on rate base (RORB) of eight percent annually according to an agreement made with their global and local creditors.
The current RORB of Meralco is 5.4 percent, and it is estimated that a P0.30 per Kwh rate hike will allow the company to achieve the desired level alongside the coming onstream of the 1,000-megawatt (MW) gas-fired Sta. Rita power plant in Batangas and the Quezon Power Corp.
The power plant is operated by First Gas Power Corp., an energy corporation allied with First Philippine Holdings Inc. (FPHI) of the Lopez clan. It will feed energy exclusively to Meralco starting April or May this year.
Meralco president Manuel M. Lopez has said the company is working out a scheme wherein the consumers will not experience any change in their bill despite an application for a rate increase.