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Meralco sees no impact from lifeline rate extension

MANILA ELECTRIC CO. (Meralco) said Tuesday that the pending extension of the lifeline power rate subsidy will have no effect on the distribution utility, as the subsidy is paid for by all consumers.

On Monday, the Senate approved on third and final reading the bill that extended the lifeline subsidy rate for households consuming less than 100 kilowatt-hour (kWh) per month. If passed into law, the extension will run until 2031.

“Regarding the lifeline rate subsidy extension, Meralco will defer to the wisdom of the legislators. While the scheme benefits households who cannot afford to pay the full cost of electric service, their discounts are funded by other customers who have to shoulder the rate add-ons,” according to a quote provided by Meralco’s media relations office via Viber Tuesday, attributed to both the company’s Head of Corporate Communications Joe R. Zaldarriaga and Meralco Head of Utility Economics Lawrence S. Fernandez.

End-users who qualify for lifeline subsidies are entitled to discounts of up to 5% on their power bills, according to Meralco’s website.

The current lifeline rate subsidy shouldered by non-lifeline consumers in the Meralco franchise area is P0.0478 per kWh.

Meralco assured regulators of its “compliance and continued support” to the government when the measure seeking extension of the lifeline subsidy is passed into law.

Senate Bill No. 1877 passed on third reading with 19 votes, zero negatives and one abstention.

“Malaking kaluwagan ito sa mga kababayan nating patuloy na nagdarahop dala ng kawalan ng pinagkakakitaan na lalo pang pinalala ng nararanasan nating pandemya. Sa pamamagitan ng panukalang ito, makakaasa silang hindi mapuputol ang ayudang tinatamasa ng dalawang dekada na. (This is a huge relief for our countrymen who experienced financial hardship during the pandemic. With this bill, they can hope to avail of the subsidy which has been extended to them for 20 years),” Senator Sherwin T. Gatchalian said in a statement after the bill passed.

Mr. Gatchalian, who chairs the senate committee on energy, said that he was “optimistic” that the bill will be enacted before the lifeline rate provision under the Electric Power Industry Reform Act of 2001 (EPIRA) expires on June 26.

“If passed into law, some 5.5 million households stand to benefit from the socialized pricing mechanism until June 2031 and have an estimated annual savings of P900 on electricity expenses,” he said.

EPIRA originally allowed for a lifeline subsidy of 10 years, starting 2001. It was further extended by 10 more years in 2011. — Angelica Y. Yang

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