ERC wants Meralco to roll out smart meter scheme in phases

By Lenie Lectura – October 19, 2020
from Business Mirror

The Energy Regulatory Commission (ERC) wants the Manila Electric Co. (Meralco) to gradually implement its Advanced Metering Infrastructure (AMI) program to minimize the impact on consumers who will eventually shoulder the cost.

“We made a suggestion and ask them if phasing is possible to avoid incurring huge costs as this may be passed on to consumers. At the end of the line, it will be the consumers” ERC Chairperson and CEO Agnes VST Devanadera said in a mix of English and Filipino.

AMI is an integrated system of smart meters, communication networks and data management systems that enables two-way communication between utilities and customers.

The smart meters can handle prepaid and postpaid electricity services. Subscribers with smart meters can manage their electricity usage and budget through consumption information, alerts and notifications.

Meralco filed its application for approval of its AMI project with the ERC three years ago. It has been pending with the ERC since March 2017.

While the ERC applauded Meralco for its initiative to introduce state-of-the-art technologies that will help consumers manage their electricity consumption, Devanadera said it is up to the ERC to see to it that the installation of AMI will not adversely affect the consumers in terms of paying higher electricity rates.

Devanadera said this is ERC’s main reason for not immediately acting on Meralco’s application.

“We estimate that Meralco’s proposal will cost around P7.7 billion and this was filed under their capex [capital expenditure]. In our assessment, the cost is huge. Will efficiency justify the cost of putting this kind of infrastructure?  The bigger and more sophisticated infrastructure is something now under consideration by the ERC,” said Devanadera.

She added that the agency is seeking the technical expertise of the Department of Information and Communications Technology (DICT) on the matter.

“We already touched base with DICT because they may be able to come up with a software or program that can act and help us out on the technical side. We are also in touch with Meralco to stress the fact the cost-benefit analysis is very important,” said the ERC chief.

Based on initial calculations, the ERC said in the past that an average rate adjustment of P0.2309/kWh will be added to the customers’ electric bill if the smart meters will be shared by all Meralco customers. If it will be charged only to Meralco bulk customers, the average rate adjustment is P0.3972/kWh.

Meralco filed its application for approval of its AMI project with the ERC in accordance with the “Rules to Govern the Implementation of Advanced Metering Infrastructure (AMI) by Distribution Utilities and other ERC-Authorized Entities.”  The pending application involves one million smart meters.

In connection with its AMI application, Meralco included the smart meters and other devices and systems necessary to implement its AMI project in its application for capital expenditures in April 2017.

The subject Rules, which was promulgated in May 2016, requires ERC approval prior to the implementation of any AMI project.  Furthermore, it provides that the cost of all meters, devices, hardware, software and processes necessary to implement the approved AMI project, whether offering basic and/or supplemental services, may be passed on to consumers subject to the applicable ERC rules and regulations on capital and operational expenditure approvals.