ERC to deliberate on Meralco rate hike

MANILA, Philippines – Regulators will deliberate on the planned over P3 increase in Manila Electric Company’s (Meralco) power rates this month and find ways to minimize its impact on consumers.

Meralco announced it will hike the generation charge by over P3 per kilowatt-hour (kWh) in December as a result of the shutdown of the Malampaya natural gas platform and outage of other plants where it sources power from.

Energy Secretary Carlos Jericho Petilla said he’s in talks with the power distributor to implement the hike on staggered basis, but only “with the approval of the ERC (Energy Regulatory Commission).”

ERC Executive Director Francis Saturnino Juan said, “The ERC will be deliberating on Meralco’s generation charge and its proposed staggering of its recovery of generation costs incurred in order to reduce the generation charge increase for December.”

Petilla said the impact on consumers will be minimized if the increase is implemented on staggered basis over the next three months. “December is an expense month. So I’d rather have it in three months.”

Meralco and ERC officials will meet and discuss this on Monday, December 9, he said.

A P3 per kWh increase in generation charge will amount to a P600 increase in electricity bills of consumers using an average of 200 kWh per month. Other components are also expected to increase, such as VAT, local franchise tax, and transmission charge.

Given these, experts said consumers using 200 kWh monthly may pay P750 more. This will be the highest in history, Petilla stressed.

The generation charge will increase because of the scheduled maintenance shutdown of the Malampaya facility.

The facility provides natural gas to the 1,200-megawatt (MW) Ilijan plant owned by Kepco Philippines Corporation, and the 1000-MW Sta. Rita and 500-MW San Lorenzo facilities of First Gen Corporation of the Lopez group. These power plants provide 40% of the electricity needs of Luzon.

Meralco will now have to source power from the Wholesale Electricity Spot Market and plants that run on diesel, which is more expensive than natural gas.

The scheduled maintenance of Malampaya started on November 11, after the onslaught of Typhoon Yolanda, and will end on December 9. (READ: Malampaya shutdown moved due to Yolanda)

Officials said the Malampaya shutdown was compounded by the outage of other plants where Meralco also sources its power requirements.

Petilla said the agency will also look into reports that there was collusion among power plant owners. “We are also going to look into the reported unusual number of outages during the Malampaya shutdown,” he said. – Rappler.com