ERC to review SMCGP rate hike plea

The Energy Regulatory Commission (ERC) said that it will assess the Php0.30 per kilowatt-hour (kWh) rate hike plea of the SMC Global Power Holdings Corporation (SMCGP) for its power supply agreements (PSAs). 

In a report by Manila Bulletin, newly appointed ERC chairperson Monalisa Dimalanta said that SMCGP’s plea would have serious implications thus requiring their careful evaluation. 

The San Miguel unit filed for a rate hike amid the rising costs of fuel purchases to run the Ilijan gas-fired power plant, and Sual power plant – which both have contracted capacities with the Manila Electric Co. (MERALCO) 

Dimalanta added that the ERC needs clarification on the competitive selection process (CSP) observed by MERALCO, but also how the terms of the PSAs are being observed and implemented by the involved parties. 

ERC will be scheduling a ‘clarificatory hearing’ on SMCGP’s power rate hike plea. 

SMCGP earlier expressed its intention in terminating its two PSAs with MERALCO by October 4 if the ERC would ignore its petition. 

In related developments, the ERC has yet to check if other power generation companies with PSAs with distribution utilities are having the same concerns as SMCGP and what financial coping mechanism they are taking. 

ERC will also examine how current developments in the industry will weigh on the “least cost” parameter in determining CSP bid winners – especially if there would be eventual renegotiation in the PSAs.