Manila Electric Company (MER, the Company) is the largest electricity distributor in the country providing power for over 5 million customers in 31 cities and 80 municipalities. The Company was awarded with the 25-year franchise covering an area of 9,337 km2 in 2003. To illustrate MER’s business:
The Company buys electricity from the Whole Sale Electricity Spot Market and power plants. MER then sells it to customers with no profit but just enough to cover the costs. The cost of electricity in the said process is called pass-through charges. Pass-through charges are revenue neutral or in other words, it does not add to profit nor does it cause losses to the Company. MER generates revenues through the collection of distribution charges. It is the costs paid by customers for using MER’s transmission lines and its services.
MER’s Strategy for Growth
The Company intends to source…
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