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The Energy Regulatory Commission (ERC) released an Order on June 27, 2007 granting
provisional approval on Meralco’s application for time-of-use rates (TOU).
Following this provisional approval, the company launched its Meralco Bright &
Right Time-of-Use (TOU) Rate Scheme this July.
Following are more details on the Meralco Bright & Right Time-of-Use Rate Scheme.
What is Time-of-Use Pricing?
Time-of-use (TOU) rate is an energy-pricing scheme which approximates the cost of
power at different times of the day. TOU rates are based on the time of day
electricity is produced and on the cost of supplying electricity during that time.
It is a special rate option approved by the Energy Regulatory Commission (ERC) to
give customers an opportunity to reduce their electric bill - particularly on the
generation charge component - by using more electricity at the time of the day when
the rates are low.
How can TOU help reduce a customer’s electric bill?
This rate scheme encourages customers to shift use of electricity from the peak
periods to off-peak periods of the day.
Currently, a customer pays a flat rate (weighted average) for the generation charge
regardless of the time of day he uses electricity. Under the TOU scheme, the customer
has the chance to pay less for the electricity used by shifting his use of major
appliances to off-peak periods where he will be charged a lower rate for the power
consumed.
Otherwise, if the customer consumes more during the peak periods, and there is no way for
him to shift to off-peak, then the time-of-use scheme will not give him savings or any
benefit.
What is a peak period and an off-peak period?
Meralco’s TOU pricing consists of two time periods: the peak period and the off-peak period.
Peak periods are hours of the day when the demand for electricity is high. Energy prices
during peak periods are substantially higher than the charges during off-peak periods.
This is because more power plants, including those running on expensive fuels, are needed
to run during the peak hours to supply and meet the demand for electricity. During off-peak
or low demand, only plants running at low operating costs supply the electricity.
What are the peak and off-peak hours?
Peak Periods
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Monday to Saturday
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8:00:01 a.m. to 9 p.m. (13 hours)
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Sunday
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6:00:01 p.m. to 8 p.m. (2 hours)
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Off-Peak Periods (where electric rates are lowest)
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Monday to Saturday
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12:00:01 a.m. to 8 a.m. & 9:00:01 p.m. to 12 midnight (11 hours)
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Sunday
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12:00:01 a.m. to 6 p.m. & 8:00:01 p.m. to 12 midnight (22 hours)
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How much are the time-of-use (TOU) rates?
Meralco’s TOU rates will consist of a basic charge plus a generation charge adjustment (GCA). The GCA
will adjust the basic generation charge for monthly movements in generation cost as well as other
generation rate adjustments as approved by the ERC.
The table below shows the basic generation charges as provisionally approved by the ERC:
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Weekday (Monday to Saturday)
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Dry Season (Jan.-June)
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Wet Season (July - Dec.)
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Peak Rate
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P6.4852/kWh
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P6.1053/kWh
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Off-Peak Rate
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P3.0925/kWh
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P3.0925/kWh
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Weekend (Sunday)
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Peak Rate
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P6.4852/kWh
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P6.1053/kWh
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Off-Peak Rate
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P3.0925/kWh
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P3.0925/kWh
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Pricing varies during the wet and dry seasons. The wet season is from the months of
July to December while dry season is from the months of January to June. Demand for
electricity during the wet season is characteristically lower, and more power is
harnessed from hydroelectric plants. Hence, the peak rates are lower during the wet
season compared to the dry season.
The basic generation charge was calculated using a base month, assuming a power sourcing
mix and cost of purchased power. Each month, the peak and off-peak basic charges will be
adjusted through the GCA, to reflect the true cost of power at the time it was consumed.
These adjustments may go upwards or downwards depending on the sourcing conditions during
the supply month.
Will the customer need a special meter to avail of the TOU rates?
Yes, a TOU meter will be needed to replace the customer’s existing meter to record the
total kilowatthour consumption. The meter's computerized clock keeps track of the energy
use during different times of the day and year.
Who are qualified to avail of Meralco’s Bright & Right TOU Rate Scheme?
For phase 1, we are initially offering this scheme to industrial and non-industrial
customers with a 12-month average peak demand of at least 750 kW and to residential
customers with a 12-month average consumption of at least 2,000 kWh prior to the date of
their application.
Phase 2 will include residential customers with a 12-month average consumption of at least 1,000 kWh.
Succeeding phases will be proposed depending on the results of phase 1 and 2.
Are there fees involved with this TOU-pricing scheme?
Yes, there is an application fee* depending on the customer’s electric load requirement. The provisionally-approved fees are:
For Residential Customers
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1-Phase Meter
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3-Phase Meter
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One-time Application Fee
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P 2,720.00
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P 3,890.00
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Monthly Additional Charges
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Metering Charge
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P 117.20/month
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P 175.63/month
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Supply Charge
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P 0.0109/kWh
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P 0.0109/kWh
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For Industrial and Non-Industrial Customers
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One-time Application Fee
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P 24,640.00
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Monthly Additional Charges
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Metering Charge
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P 1,247.99/month
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Supply Charge
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P 18.04/month
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What are the components of the application fee and why are customers required to pay for it?
The application fee is a one-time cost for TOU applications. This fee contains a portion of the
incremental cost of the time-of-use metering, cost to install the TOU meter, costs to enhance
our systems, additional costs to reformat the bills and the cost of information campaign.
Why are TOU customers required to pay a monthly incremental supply charge and metering charge?
The incremental metering charge covers the additional costs to operate, maintain and read the TOU meter.
The incremental supply charge is for the additional costs to handle the billing, payments and customer inquiries of time-of-use customers.
Can a customer get out of the agreement anytime?
Yes. There will be a termination/exit fee equivalent to the remaining portion of the incremental metering and other additional
costs associated with the time-of-use implementation.
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