Practical Meralco Meter Reading for a Selfie Nation. Cheaper and Faster. Thinking Outside the Box

David Celestra Tan, MSK
11 June 2020

The Important Role of Electric Meters

The supply of electricity 24 hours a day is a contract between the Distribution Utility like Meralco and the electric consumer. Standing between them is this relatively small gadget mounted on the wall or fence, dutifully measuring the electricity that was supplied and consumed. It is the quiet arbiter of the obligations of one to the other on how much service was provided and how much needs to be paid every month. It is on the job 24/7. (Unfortunately there is no meter that also measures the number of power interruptions)

To do it right, Meralco needs to read the meters every month, 6.5 million of them. You can imagine even for a big organization like Meralco with a metering budget of about P850 million a month, it can be a daunting manual task. Partly because of the expanse of the mega-franchise it was able to gobble up and the grown congestion and traffic in the metropolis. Meralco has also not changed much its methods other than shortcuts like consumption averaging and estimating.

Manual meter reading dates back to the time of Thomas Alba Edison 139 years ago in 1881.   In this day and age of digital and internet technologies there has got to be a better way. 

But First things first

Before we go into details, allow me to Segway and answer first a question on our proposed 30% reduction in Meralco’s charge for above-average Covid-19 Quarantine Consumption. Yes the ongoing controversy over Meralco’s May bill that skyrocketed to 400% of normal. A reader asked “Why blame Meralco only? that is the way the other utilities and even electric coops are doing it”.

Could be true in general. Indeed, a distribution utility’s customers are grouped into classes. Let us simplify it according to Meralco’s groupings. Small and lifeline using 200kwh and less a month, those using more than that, and the really large users, the industrial and large commercial establishments. The Distribution, Supply, and Metering charges and Systems loss charges are different.  It is supposed to average overall P1.3810 per kwh. But small and lifeline customers are charged about P1.8474 and those using more than 400kwh at P3.3321 per kwh. Now large industrial and commercial customers get charged P0.9686 per kwh, a difference of 2.3633 (71% higher).

Normal fluctuations in consumption of customer classes

These per kwh rates per class were computed by Meralco and ERC by supposedly considering the cost of providing service to these class of customers and the estimated volume of energy each class consumes.

In general, we can assume that of Meralco’s total energy sales, 20% are consumed by low income households who are charged P1.8474 per kwh,  40% by higher income consumers using more than 300kwh a month all the way to 5,000kwh and charged P3.3321 per kwh, and then 40% by large industrial and commercial customers who are charged only P0.9686 per kwh. Lets call them lower, middle , and upper groups of customers for purposes of this discussion. (notice the big disparity in charges)

It is true that in normal periods, the consumption of each class fluctuate on month to month and their shares of the total energy sales also fluctuate by 1 to 3%. So it is not a problem because over the course of the year, it should even out. That is if Meralco and ERC had correctly used the proportion of energy sales between the customer classes.

It is also important to point out that the variations in the volumes of sales of Meralco between these customer classes do not mean the corresponding increase or decrease of cost of providing the service to Meralco other than the generation charge. If more power flows to the industrial customers it does not increase the cost of the lines and service to those customers. Similarly, if more power flowed to the residential customers, it also does not increase the cost of providing the service other than generation cost. It doesn’t cost anymore to read the meter regardless of the consumption.

The Unusual Covid-19 Consumptions

The unusual situation during this Covid-19 pandemic and lockdowns caused an unusual disproportion in the energy sales on which the kwh rates were based. We estimate that the lower customers of under 200kwh consumed 30% of the energy sales instead of 20%, the middle group consuming more than 200kwh up to 5,000kwh consumed 60% instead of 40%, and the upper group of large customers down to 10% instead of 40%.

The industrial and large commercial customers (upper group) suspended operations causing a reduction of their usage by about 702 million kwh and Meralco lost these sales at P0.9686 per kwh or a total of about P680 million a month. This 702 million kwh however was consumed by the residential customers (lower and middle) due to the stay at home quarantine. Now Meralco is charging them P1.8474 for the lower group (about 234 million kwh) and P3.3321 per to the middle group (about 468 million kwh) for a total revenue of P1.992 Billion compared to P680 million if those were sold to the Upper group. The windfall revenue is P1.312 Billion for May. For the 2-1/2 months so far of covid-19 quarantine, the windfall is P3.28 billion. This is lower than our initial estimate of P4.2 billion windfall to Meralco after conceding, for arguments sake, that the lower group of small and lifeline customers also increased their electric usage by about 50%.

Stated another way, we believe Meralco should be allowed to charge the residential customers only P0.9686 per kwh for DSM and Systems loss for the Covic-19 quarantine excess consumption instead of the normal residential rates of P1.8474 for the lower customer group and P3.3321 per kwh for the middle customer group.  Remember we said it does not increase Meralco’s cost of service to residential customers anymore if the energy consumption increases. Only the generation costs.

Violation of ERC Approved MAR

Allowing them will violate their approved Maximum Allowed Revenue set by the ERC under the PBR rate setting methodology. Besides we repeat it would be morally insensitive and exploitive of the already suffering consumers.

This applies to only those with MAR approvals under the PBR rate method. Electric Coops are not, and most do not have a high proportion of large industrial customers.

Now back to Electric Meter Reading

From indications and if you are a long time Meralco consumer, you know that Meralco does not read your meter all the time. They do averaging. This means they skip actual reading and do it maybe every other month specially the smaller consumers. The theory being that over the course of the two or three months, the consumer will be billed his actual. With this system, it is also possible that you are billed more in the month with a higher Meralco total charge and vice versa. You hope that over the course of the year your total bill averages out fairly.

Smart Metering

In the last 15 years with advances of digital technology and communications, smart and remote reading meters are being introduced. It has been proven in many countries. Meralco is supposed to be introducing these smart meters. But maybe only for large consumers because remote metering cost more and not for the some 3 million low income consumers with low consumption.

Smarter Meter Reading

There is however a smarter way to read the meters every single month and in fact on a daily basis if you want using modern telecommunications technology in a simple but accurate way. We are not talking about the smart meters that has communications capability to transmit the usage register data to the home computer. That requires expensive smart meters.  We are referring to a Self Picture -Reading Method by the use of text or viber, WhatsUp, or email. In fact we do it everyday.

Electric end-users can use their cellfone camera to take a picture of their meter reading at the appointed hour and text or email the screenshot to Meralco who will then enter the data into their computers. You can also do a selfie with your meter. (Smile!)

Yes but how do you know if they actually took the picture reading on the right day?  Simple also, and MVP Group will love this. To validate that the picture was taken on the day, the user will buy the Philippine Star issue for the day and picture it together with the meter. We are sure Meralco will recognize the front page of their sister newspaper for the day. (okey, Inquirer, Manila Bulletin, BusinessMirror, Standard,  Manila Times and others can also be used!)

Consumers who want to do Self Picture Reading will have to enroll with Meralco for this program and Meralco will create a computer system and data base to enable them to load the data from the text reading, compare it with the previous reading and viola, you have the actual meter reading and consumption.  Hopefully no arguments, no estimation, no averaging, no overcharging. This user generated meter reading is very transparent, timely, fast, and cheap.

Enrollees for this program can be given a P0.15 per kwh self-meter reading discount and will have the added advantage of being consumption conscious because he is doing the meter reading himself.

Meralco of course can choose to do onsite manual reading every 3 or 4 months to audit and validate.

This is smarter meter reading, Philippine style. The text and selfie capital of the world. Say Cheese! it is meter reading day!

How about it Meralco?

Meanwhile, please charge residential customers only P0.9686 per kwh for excess consumption during Covid-19 lockdowns. And also charge them only for actual kwh consumed not estimates.

Matuwid na Singil sa Kuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph