Meco: Many factors involved in rise of electric bills

·3 min read

THE Mactan Electric Company (Meco) insists that it does not overcharge consumers.

This was what Gilbert Pagobo, Meco senior vice president and general manager, said during the hearing of the committee on energy at the Lapu-Lapu City Council session hall on Thursday, September 1, 2022.

While he admitted that electric bills have gone up, he attributed this to transmission and generation rates increasing from time to time.

He pointed out that they have not raised the distribution charge of P1.4408 per kilowatt-hour for 12 years, saying it is the only rate where Meco earns, per regulation of the Energy Regulatory Commission (ERC).

He said Meco’s total average rate of P14.1550 in August was not much higher compared to the rates of other distribution lines.

Factors

Pagobo said that according to the Cebu Energy Development Corp. (CEDC), Meco’s power supplier, the price of coal and the peso and US dollar exchange rate affect the electric bill.

He said the price of coal in 2019 and 2020 was US$80 per metric ton on average compared to the current price of US$396.21 per metric ton.

The increase reportedly started in 2021 before skyrocketing in the first quarter of 2022 due to the Russian invasion of Ukraine in February.

Pagobo said Russia is the biggest natural gas exporter and second biggest exporter of crude oil in the world.

“When the electric bill goes up, it’s not only because the price of coal went up but the cost of transportation also increased, which is very much influenced by the Forex (Foreign Exchange Market), which also went up,” he said in a mix of Cebuano and English.

According to the forecast of CEDC, electric bills won’t go down until the second quarter of 2023.

However, Pagobo said consumers can only expect a minimal drop since the price of coal may hover at US$200 per metric ton.

He said Meco gets its power supply from the Wholesale Electricity Spot Market, where the average generation charge rose from P9.10 to P28.

He said the trend is not only happening in the Philippines but in the whole world.

Meanwhile, the council’s committee on energy asked Pagobo to assign “exceptional” staff to deal with complaints regarding “estimated billing,” which Meco issues when its meter readers cannot do their job due to circumstances that include flooding, the presence of dogs near the meters or when gates are closed, among others.

Pagobo said “estimated billings” don’t happen every month, adding that the next bill will be adjusted.

Automated meter reading

Pagobo said Meco is also weighing whether to adopt an automated meter reading system.

He said the plan requires massive investment. If they push through with it, Meco will be forced to raise the distribution rate, he said, adding that 14 meter readers will lose their jobs.

He said the distribution rate will go up every time the system is upgraded, which is every five years.

The ERC has yet to approve Meco’s contract with San Miguel Global Power Holdings Inc. to supply it with 50 megawatts at the price of P3.33 kilowatt per hour.

This prompted the City Council to pass a resolution, urging the ERC to act on the matter.

Rates and bill updates

Pagobo urged consumers to browse Meco’s website and to register at their office so they can learn about their electric bills through text message.

Only 25,000 of Meco’s 105,000 consumers have so far availed themselves of the service, he said.

Meco was invited to appear before the committee hearing to shed light on issues surrounding the power rate increase that bothered consumers in Lapu-Lapu City. (MKG, PJB)