Under the current set-up, Meralco buys electricity from state-run National Power Corp (Napocor) and its independent power producers on behalf of its more than 4 million residential, commercial and industrial customers.

''We wish to announce that the government has accepted Meralco's unconditional offer contained in a letter addressed to President Gloria Macapagal-Arroyo to give its large industrial and commercial customers with demand volume of at least 1MW the choice of determining their own suppliers,'' Energy Secretary Raphael Lotilla and Economic Planning Secretary Romulo Neri said in a joint statement.

Meralco's decision to allow open access is expected to boost Napocor's revenues as industrial and commercial clients of the power distributor may opt to buy electricity directly from Napocor. They will then have to pay a wheeling fee for the use of Meralco's distribution lines.

The impact on Meralco's revenues from the move is not immediately known.

Lotilla said this should not affect Meralco's existing power purchase contracts with its independent power producers since currently not all of Meralco's captive market can be supplied by Meralco's IPPs.

''We anticipate that this offer and its acceptance will help enable the industrial sector to avail of the lower time-of-use rates of Napocor, help reduce the costs of doing business in the Meralco franchise area, promote investments and the creation of additional jobs, and help push privatization forward, Lotilla said.

He said President Gloria Arroyo has directed Napocor and the National Transmission Co to finalize with Meralco within two weeks the details of the deal.