ERC reviewing Meralco’s power hike bid

ERC reviewing Meralco’s power hike bid

The Energy Regulatory Commission (ERC) is set to decide on Manila Electric Co.’s (Meralco) petition to stagger the P0.92 per kilowatt-hour rate increase caused by the 20-day Malampaya maintenance.

“We know the urgency of Meralco’s application and we are already reviewing it,” ERC chairman Jose Vicente Salazar said.

The power retailer asked the ERC to approve the rate increase, divided into P0.30 per kWh in March, P0.30 per kWh in April, and P0.32 per kWh in May to soften the impact on consumers.

“To mitigate the effect of the abrupt increase in generation costs due to the use of liquid fuel, especially considering that the WESM [Wholesale Electricity Spot Market] prices may also increase during the period, Meralco proposes that instead of reflecting the full incremental incremental fuel cost component of the total generation costs in the March 2017 generation  charges, it be allowed to implement the increase in three billing months starting March until May 2017,” Meralco said.

On the other hand, Bayan Muna Rep. Carlos Isagani Zarate asked the ERC to junk Meralco’s bid.

“What specific provision in the power supply agreements (PSAs) of Meralco with the generation companies would justify ‘capacity fee adjustments’? Is this a yearly adjustment? Or it is just an unfortunate incident that always coincides with Malampaya’s shutdown?” Zarate asked.

“Appallingly, while our poor people will be burdened once more with these price hikes, we are yet to be fully apprised on the results of the ERC investigation on the alleged collusion of generation companies and Meralco during the 2013 November-December Malampaya shutdown,” he added.

The Malampaya maintenance drove natural gas power plants to use alternative fuel like diesel, which is more expensive at P6 to P8 per kWh. Natural gas is priced at P4 per kWh.

Read: Meralco proposes staggered payments for power rate hike

Despite implementing measures to mitigate the impact of the maintenance, rates were still expected to increase.

Read: Power rates could rise by P1 per kWh due to Malampaya shutdown

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  1. Elmer B. Sambo

    The proposed increase in rate could have been calculated even before the Malampaya shutdown. ERC should dictate how much increase is justified (assuming this is legal) and should not wait for Meralco to propose. The consumers feels a backdoor arrangement can come out from this review.


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