Infrawatch PH opines that the Energy Regulatory Commission (ERC) should expedite its ruling on Manila Electric Company’s (MERALCO) rate reset, warning that further delays could impact both consumer and investor confidence.
In a report by Philippine Star, the think tank called for an immediate decision on MERALCO’s fifth regulatory period (5RP) from 2022 to 2026, which was reportedly ruled as a lapsed period.
Infrawatch PH convenor Terry Ridon said the ERC should finalize its decision on the 5RP, allowing MERALCO to proceed with its sixth regulatory period (6RP), set to start in July 2026, saying that this guaranteed performance-based regulation’s (PBR) promised benefits for customers and help attract investor interest.
The ERC reviews rate adjustments for private distribution utilities like MERALCO according to the distribution wheeling rate rules established before each reset under PBR.
For MERALCO’s 5RP, a final determination should have been made before July 2022.
Additionally, the distribution utility’s (DU) rate reset is based on PBR, a global methodology that calculates revenue needs for the next four years.
Ridon argued that applying these rules retroactively to a lapsed period where actual costs are known would be procedurally and substantively unfair to both consumers and utilities.
Consumers pay rates based on outdated costs during lapsed periods.
Once approved, the ERC can require utilities to make necessary adjustments, including refunds, to reconcile any discrepancies.
Previously, MERALCO senior vice president for regulatory management Jose Ronald Valles estimated that about Php 16 billion in refunds could be due to consumers after the ERC’s 5RP decision.
ERC chairperson and CEO Monalisa Dimalanta recently indicated that the commission expects to issue the 5RP decision by the end of the year.
