A closer look
NEARLY half of the Philippine economy rests on production of goods and services in the National Capital Region where there is a heavy concentration of commerce and industry.
All of this economic activity relies on a reliable supply of electricity.
Let’s take a look at what Manila Electric Co—which has a total customer base of almost eight million both commercial and household — charges its customers for every kilowatt hour they consume.
Rates are different for commercial and household users and the impact of these on business operations and household expenses is immense.
Commercial customers factor in their electricity expenses in their overall finance numbers. Whether they succeed or fail depends so much on what they spend on electricity.
Big businesses, or those on the list of the country’s top 100 companies, can offset their expenses on electricity by using their own small power plants or renewable facilities which they can afford to build.
But the effect of these electricity rates on the goods or services that these big companies provide is consequential even if largely unseen by the consumers of these goods or services.
Businesses that aren’t big enough to wean themselves away from Meralco are chained to the utility and could rise or fall depending on power supply.
The impact on households is even more tremendous. A recent survey showed that a family of five devotes 15 to 20% of its regular expenses on keeping their homes connected to the Meralco grid. It also showed that at least 70% would drop expenses on food and medicines if confronted with the threat of disconnection.
Logic would dictate that Meralco’s monetary share in consumer billing depends on how high or low the rates are.
The higher the rates, the higher would be Meralco’s profit. Plain and simple.
