Meralco told to hold off any hike in Jan rate

MANILA, Philippines – Defer any further adjustment in the generation charge.

This was the Energy Regulatory Commission’s (ERC) response to Manila Electric Company’s (Meralco) notice, informing the regulator about a possible new adjustment in the generation charge next month.

ERC issued a five-page order late Friday, December 20, directing Meralco to keep its original generation charge estimate of P7.37 per kilowatt-hour (kWh) for the January billing.

ERC issued the order after Meralco informed it that the charge for next month would likely be higher than the estimate.

Meralco said it would receive billing from its power suppliers on December 26 and this would be validated and any necessary adjustment would be reflected in the January bills of customers.

But ERC stood firm against any further increase. It said as regulator, it is mandated “to ensure the adequate promotion of the consumer interest under Section 41 of Republic Act 9136” as well as “validate that no abuse of market power was committed by any of the participants in the spot market.” (READ: ERC to deliberate on Meralco rate hike)

ERC cited “the severe impact that any further adjustment may cause the consumers within the franchise of Meralco” and invoked the exception clause under its Automatic Generation Rate Adjustment Rules, which state that “where good cause appears, the Commission may allow an exemption from any provision of these rules, if such is found to be in the public interest and is not contrary to law or any other related rules and regulations.”

ERC stressed that “in observance of due process,” it would still “undertake a confirmation process” to “safeguard that the generation charges that will be passed on to consumers pass the test of prudence and reasonable economic costs incurred.”

Energy Secretary Carlos Jericho Petilla reiterated the ERC order applies only to the January billing. “That does not affect the previous order of staggered payments which cover the December billing.”

Meralco implemented a P4.15/kWh increase in power rates in December, of which, the generation charge accounted for P3.44. ERC allowed the company to implement the December increase in three installments: P2.41/kWh in December, P1.21/kWh in February and P0.53/kWh in March. – Rappler.com