The questioned costing method of Manila Electric Co. where it has included in the computation of electricity bills in its franchise area the expenses it had incurred that had nothing to do with those related to its business as a distribution utility remained unresolved at the Supreme Court.
Well, what the asset valuation matrix provided was an optimal return for Meralco that goes higher year after year. Last year, the company reported earnings of P28.4 billion, higher by 21 percent from its year-ago income, due to higher revenues. Contributing to its hefty gains was its gas-fired power plant from Singapore.
The pass-through charges also include the depreciation of the peso vis-à-vis the dollar, the 16 percent increase in the average retail rate for electricity to P9.52 per kilowatt hour from the previous P8.24 per kwh. After all, these pass-through charges are meant to shield the distribution utility from the risks associated with operating its business.