ERC approves condensed Meralco rate hike

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The Energy Regulatory Commission (ERC) has approved Manila Electric Co. (Meralco)’s proposal to stagger the impending rate hike this month caused by the maintenance shutdown of the Malampaya gas facility last month.

However, the commission only allowed an increase of P0.66 per kilowatt-hour, or P0.2211 per kwh in generation charges per month from March to May.

The approved increase adjustment covering the fuel cost is lower than what Meralco applied for. Initial petitioned hike was P0.9174 per kwh. Consumers would have paid an additional P.030 per kwh in March and April, and P0.3174 per kwh in May.

“We will keep on finding and devising initiatives that will work for the benefit of the consumers by achieving competitive power rates and quality service from electric service providers,” ERC chairman and CEO Jose Vicente Salazar said.

The adjustment was because ERC’s computation reflected a lower total cost of 1.752 billion versus Meralco’s proposal of P2.417 billion.

“When Meralco applied for the staggering, they used forecasted data, projections but we required them to submit actual bills, they were able to submit late last week, and that was what we used to calculate,” ERC Spokesperson Floresinda Digal said.

Digal said that the approved rate only covers the incremental fuel cost from power plants affected by the shutdown, and that generation charge can still rise if charges from the wholesale electricity spot market and Meralco’s power supply agreements are taken into account.

In January, Meralco filed a petition of a staggered recovery and payment of the differential generation charge following the Malampaya maintenance shut down from Jan. 28 to Feb 16.

Meralco said that natural gas plants had to run on alternative fuels that are more expensive than what the Malampaya facility provides.

Malampaya fuels around 40 percent of gas-fired plants in Luzon; Ilijan, Sta. Rita, San Lorenzo, San Gabriel and Avion plants that supply 3, 211 megawatts (MW) to the Luzon grid, while 2, 565 MW of these is supplied to the Meralco franchise area.

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