1. What is unbundling of rates?

Unbundling is simply the identification and breaking down of the individual charges or component of the rates being charge to the consumers.

2. Is unbundling favorable?

Yes it is. The Unbundled Electric Bill will show you the detailed information of what you are paying and where will it go.

3. What are the components of Unbundled Electric Bill?

The following are the components of unbundled electric bill:

3.1 Generation Charge

refers to the cost of power generated and sold to SURSECO I by NPC as well as the Independent Power Producers (IPPs).

3.2 Transmission Charge

refers to the regulated cost or charges for the use of transmission system to deliver electricity from its source or from the generating company like NPC and IPPs to the distribution utility like SURSECO I.

3.3 System Loss Charge

represents recovery of the cost of power lost due to technical and non-technical losses currently pegged at 9.5% for private distribution utilities like MERALCO and Davao Light, and 14% for electric cooperatives. Starting 2010, the cap is reduced to 13% for electric cooperatives.

3.4 Distribution Charge

is the regulated cost of operating and maintaining the distribution system, which brings power from high-voltage transmission lines to the end-users.

3.5 Supply Charge

includes the cost of rendering service to customers, such as, billing, collection, customer assistance and related services.

3.6 Metering Charge

is the cost of metering, its reading, operation and maintenance of power metering facilities.

3.7 Lifeline Rate Subsidy

refers to the subsidy given to marginalized/low-income end-users who cannot afford to pay electricity at full cost.

3.8 Lifeline Discount

refers to the discount given to marginalized/low-income end-users based on actual consumption level every month as follows:0 – 15 kWh – 50%

16 – 20 kWh – 10%


3.9 Power Act Reduction

is a P0.30/kWh reduction in the electric bill of residential customers as mandated under R. A. No. 9136.

3.10 Universal Charge

refers to the charge imposed for the recovery of stranded debts, stranded contract cost of NPC, and other mandated purposes. It is collected from all end-users on a monthly basis by SURSECO I and to be remitted to the Power Sector Assets and Liabilities Management (PSALM). At present, this consists of Missionary Electrification and Environmental Charges.

Missionary Electrification Charge refers to the cost associated with the provision of basic electricity service in unviable areas amounting to P0.0373 per kWh.

Environmental Charge is a charge to be used for the rehabilitation and management of watershed of NPC amounting to P0.0025 per kWh.

4. Is Metering Charge the same with Meter Deposit and Meter Rental?

NO ! Metering charge is the cost of metering, its reading, operation and maintenance of power metering facilities. In other words, metering charge is part of the operating and maintenance expenses of the coop. This is not meter rental.

Meter Deposit is the amount collected by the coop from the customer as security of the meter in case of lose or damage due to customer’s fault. This amount will be refunded to the customer if he/she will no longer avail of the electric service and return the meter to the coop. In effect, the coop is the owner of the meter and it is only given to customer for use.

Under the Magna Carta for Residential Consumers issued by the ERC, all electric distribution companies (private and cooperative) are mandated to provide kWh meters to their customers for free. Hence, the collection of meter deposit has already been stopped.

5. Is SURSECO I also made to refund the Meter Deposit like MERALCO?

YES! In fact, SURSECO I already submitted to ERC its computation of the total meter deposit for refund.

7. Does the meter deposit refund include interest?

NO! Under the guidelines issued by ERC, electric cooperatives like SURSECO I will refund without interest. Only private electric companies are mandated to refund with interest.

8. What is Energy Deposit?

Energy Deposit or Consumer Deposit or Bill Deposit is the amount collected from the customers to secure payment of their electric bills. Under the Magna Carta, the ERC has authorized the collection of energy deposit equivalent to one (1) month average consumption of the consumer.

9. Is the collection of System Loss Charge allowed?

YES! Under R. A. 7832 otherwise known as the Anti-Power Pilferage Act, all electric distribution companies are allowed to collect system loss charge with certain limitations. For private companies like MERALCO, they are allowed to collect up to 9.5% or actual system loss whichever is lower. For electric cooperatives, 14% or actual system loss whichever is lower.

10. Is it possible not to collect the system loss charge?

NO, but it can be minimized. Being a non-profit and service-oriented entity, electric cooperatives are allowed to collect the total cost associated in the delivery of electric service to customers. This represents the total revenue requirement of the coop which can be expressed in the Revenue Neutral equation as follows:

Revenue = Cost

Just imagine if SURSECO I will purchase power from NPC with a total cost of P1M and collected only P900T due to system loss, who will pay the balance of P100T? Definitely, SURSECO I could not absorb it because the rate being charged to consumers has no provision for profit. Thus, system loss must also be collected from the customers.

Like any grocery store, the cost of freight and handling and other expenses associated in purchasing the goods for sale are added to the selling price of the goods – plus the provision for profit.