Generation Charge

This is the composite cost of electricity generated and sold to a distribution utility such as Cotabato Light

Transmission Charge

It is the cost of transmitting power from the generation source to the receiving point of a distribution utility.

Systems Loss Charge

It is the cost of power loss recovery due to technical and non-technical system loss for delivering power to the end users.

Distribution Charge

It is the cost of developing, constructing, operating and maintaining the distribution system,which delivers power from high-voltage transmission grids to end-users. This is the only charge that goes to .

Customer Charge

A. Supply/Customer Charge

It is the cost of billing, collection and various customer-related services.

B. Metering Charge

It is the cost associated with measuring the amount of energy consumed which include meter, meter-installations, accessories and meter reading.

Lifeline Subsidy Discount

RA 9136 provides that inter-class subsidies shall be removed, except the lifeline rates applicable to marginalized or low income residential electricity users. Cotabato Light's lifeline is set at 80 kWh. This discount is applicable only to the generation, transmission, distribution, supply, metering and the systems loss charges.

The Energy Regulatory Commission has set Cotabato Light's lifeline rate subsidy as follows:

*Discount on Generation, Transmission, Distribution, Systems Loss Charge, Supply Charge, Metering Charge

Lifeline Rate Subsidy

This will cover the aid (subsidy) given to marginalized (Lifeline Rate) customers. The Uniform Retail Rate structure specified in R.A. 9136 makes it subsidy-free. It means that inter-class subsidies currently enjoyed under the existing rate structure shall be removed.

Power Act Reduction

Upon effectivity of R.A. 9136, NPC is mandated to reduce its rates for residential customers by 30 centavos per kilowatt-hour. Since Cotabato Light buys only about 50% of its power needs from NPC, its Power Act Reduction would amount to more or less 15 centavos only. Cotabato Light has only one Independent Power Producer - Therma South Inc (TSI), while it also purchases its power from Wholesale Electricity Spot Market (WESM).

Local Franchise Tax

A range of 0.60% to 0.75% of gross revenue goes to the local government as local franchise tax.

Universal Charge

It is a non-bypassable charge determined, fixed and approved by the Energy Regulatory Commission to be imposed on all electricity end-users. This is remitted to the Power Sector Assets and Liabilities Management (PSALM), owned and controlled by the government. This would include:

• Stranded costs/contracts of NPC. Payment for the NPC debts after sale of its generating assets in excess of the amount assumed by the National Government.

• Missionary Electrification. R.A. 9136 mandates NPC to carry on with its missionary function of providing electricity to non-viable, far-flung areas in the countryside even after its privatization.

• Environmental Charge.. This environmental fund will be managed by NPC, to be used solely for watershed rehabilitation and management.

• Tax Equalization. It is the equalization of the taxes and royalties applied to indigenous or renewable sources of energy vis-a-vis imported energy fuels.

• Stranded Costs/Contracts of Utilities. This refers to the distribution utilities' losses in value of generating assets and contracts approved by the ERB before December 31, 2000 as a consequence of industry deregulation.

Surcharge

This amount represents two percent (2%) of previous unpaid bills.

Automatic Fuel Recovery

The Energy Regulatory Commission (ERC) in its decision under ERC Case No. 2010-023 RC authorized Cotabato Light to recover fuel and lubricant costs incurred in the operation of its Power Plants subject to heat rate caps of 0.26 Ltr/kWh for heavy fuel and light fuel and 0.00162 Ltr/kWh for lubricant or actual, whichever is lower.