ERC approves Meralco's expanded time-of-use scheme

MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved the expanded time-of-use (TOU) scheme of power utility giant Manila Electric Co. (Meralco). 

The ERC said this will give more consumers the option to pay less for electricity consumed by merely shifting their power usage to off-peak hours.

To widen the number of consumers that will benefit under the TOU scheme, the ERC decided to approve Meralco’s request to lower the threshold from 750 kilowatts to five kilowatts for industrial/commercial customers and from 2,000 kilowatt-hours to 500 kwh monthly consumption for residential customers. 

Lowering the threshold will not, in any way, benefit Meralco but will instead benefit the consumers and will support the objective of implementing the TOU program to the fullest, the ERC noted.

“Under this modified TOU scheme, customers shall experience price differentiation between peak and off-peak and their electricity costs will depend on their particular demand curve,” ERC chairperson Zenaida G. Cruz-Ducut said.

Ducut said the higher peak price discourages consumption while lower off-peak price encourages consumption. 

“Ultimately, consumers shall enjoy the benefit of lower electricity prices if they could shift consumption to off-peak periods,” she said.

In its decision, the ERC authorized Meralco to charge the peak and off-peak TOU rates. From January to June and July to December, the peak rate on week dayswill be P6.4852 and P6.1053 per kwh, respectively. The off peak rate, on the other hand, will be P3.0925 for the period January to December.

Peak hours during weekdays are from 8:01 a.m. until 9 p.m. and from 6:01 p.m. to 8 p.m. during Sundays. 

Electricity consumers will thus enjoy off-peak rates for 11 hours during weekdays and 22 hours during Sundays.

The shifting to the TOU scheme will, however, entail installation costs. The ERC thus allowed Meralco to collect the following additional charges from customers who will choose to be billed under the TOU scheme: application fee (one-time), P2,720 to P3,890 for residential customers and P24,640 for general power.

Additional monthly charges will be P117.20 to P175.63 for residential customers’ metering charge; and 1.09 centavos per kwh per customer under the supply charge.

The ERC also required Meralco to submit on an annual basis supporting information and calculation on the incremental supply and metering charges for the verification of the ERC.

“Meralco’s TOU scheme is voluntary. The ERC, however, encourages qualified encourages electricity consumers to seriously consider availing the TOU scheme as it is a way to lower their electricity bill,” Ducut chief said.

“The TOU scheme also maximizes the usage of generating plant capacities which will eventually spare consumers from bearing the cost of constructing new plants when existing capacities can no longer meet power demands,” she added.