Meralco says uncollected revenue is about P9.5 billion. If you’re like me, that number by itself is pretty meaningless to me. So let’s do some math to wrap our heads around it.
As Ivanna says in the linked article, the rate impact will be dependent on the period of time over which the ERC allows Meralco to recover it. Let’s assume Meralco sales are about 25,000 GWh per year and that they grow at a rate of 2.5% per year. Let’s pick another number out of the air and say Meralco will be allowed to earn 6% per year on the unamortized balance.
Also keep in mind that my Meralco bill for May was 8.4 P/kWh, so let’s use that as an indicator except that we’ll increase it by 1 P/kWh to allow for the new increases allowed by ERC for power purchase and other adjustments. So that makes a base rate of P9.4k/kWh before amortization of the P9.5 billion.
My calculations indicate that if Meralco amortizes the P9.5 billion over 12 months it will have a rate impact of about P0.40/kWh or about 4% increase. If amortized over 24 months, those impacts are about cut in half.
Here are my workpapers.