Meralco Time of Use (TOU) Meter Worth It? Theoretical Computations

Monday, July 11, 2011

Late last year, Meralco quietly rolled out a program where industrial and residential accounts that qualify for the requirements can equip a new meter that is similar to what they use in other countries, wherein the rate at certain times (off peak) is different from the regular (peak) rates for the rest of the day. How's the system faring? Let's have a look see.

This is the timetable set out on Meralco's Website:

Peak Periods

Monday to Saturday 8:00:01 a.m. to 9 p.m. (13 hours)
Sunday 6:00:01 p.m. to 8 p.m. (2 hours)

Off-Peak Periods (where electric rates are lowest)

Monday to Saturday 12:00:01 a.m. to 8 a.m. & 9:00:01 p.m. to 12 midnight (11 hours)
Sunday 12:00:01 a.m. to 6 p.m. & 8:00:01 p.m. to 12 midnight (22 hours)

If you're a working person like me who's only around usually at night, or are with people who are, this sounds like a blessing in disguise. 70% of my monthly consumption comes from air conditioning and water heating, which are both active mostly during the Offpeak hours.

Fucking brilliant? Not so fast.

Now that thing about this whole scheme is that you are going to be using a different pricing scheme that is only seasonally varying compared to the usual meter rates. This is a bit strange, but we'll get into that more in a while. For now, the facts.

This is the time table provided in the Meralco Website.

Now to translate that into pesosesoses, this is what I have in my bill last month using a normal meter:

 Generation Charge (PhP/kWh)            216     5.5265           1,193.72

On the assumption that I will be using a new meter and my Peak/Offpeak ratio is 3:7, here is the new computation:

Offpeak: 151.2 x 3.0925 = 467.57 pesos
Peak: 64.8 x 6.4852 = 420.24pesos

New total: 887.81 pesos

Total savings: 305.91 pesos

That's more than 30% savings right there. And this is talking about a load of 216 KWH, which is very low for a household. There's a catch of course.

To avail of the new system, there are fees to be paid, as indicated here:

On my account, I am using a 1-phase meter as this is what's commonly used in small-medium households. I need not make any additional computations, but let's do it anyway.

The supply charge amounts to about 2.35 pesos but the metering charge practically wipes out a good chunk of savings you may get. In my example,

305.1 - 2.35 - 117.20 = 185.5 pesos net savings per month.

Given the one time application fee of 2,720 pesos and dividing that with the savings per month (ceteris paribus), you will only be able to pay off the installation fee and really start benefiting after 15 months.

To keep this simple, in order to beat the system and save decent money off the new meters, you will have to consume a whole block of kilowatts only at night, because it's 2 pesos cheaper during that time (since the average actual generation cost is 5.5 pesos) as compared to the regular rate of the new meter which is 0.6 more expensive.

Now, in the other countries, this system is also in place, and unlike ours, theirs is mandatory. I will not go on to question the price of the generation charges in our country because we are largely dependent on two very volatile energy sources - coal and hydro, but I will question why in the world did ERC approve flat rating the regular and offpeak rates, where the regular rate is a lot higher than the fix-meter prescribed rate, and have a provision that Meralco can raise the bar if they so wish.

Sure, the 117 peso surcharge is okay. Maybe the extra CPU power to crunch the already computerized billing is that expensive. I'll accept that. But what does the new meter have to do with generation costs? These costs are sent to meralco from the power suppliers. And the ERC has already given them the go signal.

What does that mean? The ERC has forced the producers to sell electricity at varying costs during varying times of the day. That means Meralco is already operating on the variable cost system for everybody, except the customer (us). That means if your meter is old, but you're using a lot of offpeak KWH compared to the regular KWH, all the savings that you should be getting is being accepted by Meralco instead. If this is the case, it's no longer surprising that the cost of generating power in the country could be so high while Meralco is still racking up record incomes in the recent years.

In other words, the less people who buy into this program, the better. They need some people to benefit, because it will give the ERC Meralco's justification for the program, but they also need to minimize the people buying in, and it seems to me they are doing it by keeping the savings marginal and the process convoluted. Less savings for us = more profit for them.

As a conclusion, the new meter can be good for you - eventually, and depending on your lifestyle. I won't claim I am sure that I did not make false assumptions here. I have not tried the system for myself but I am considering it. And it's also possible that the fixed-rates in their website is incorrect, which I'll try to clarify soon.

If you have any corrections or previous experience on this matter, feel free to comment.


Michael Spicer said...

the intstallation cost for single phase meter is 1095 peso,just had one fitted,order was placed on monday and metere changed on saturday (5 minute job)

Michael Spicer said...

the installation costs for single phase meter 1095 peso order placed on monday meter fitted saturday same week (5 minute job)


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