ERC OKs staggered Meralco rate hike

MANILA, Philippines - The Energy Regulatory Commission (ERC) has cleared the proposal of Manila Electric Co. (Meralco) to stagger the impending rate hike this month as a result of the recent 20-day shutdown of the Malampaya gas facility.

However, the approved adjustment covering the fuel cost is lower than what Meralco had applied for.

The ERC allowed the power distributor to implement an increase of P0.2211 per kilowatt-hour (kwh) in the generation charge from March to May.

Originally, Meralco applied for a total rate hike of P0.9174 per kwh, or P0.30 per kwh in March and April and P0.3174 per kwh in May.

The decision to lower the adjustment was because ERC’s computation reflected a lower total fuel cost of P1.752 billion compared to Meralco’s proposal of P2.417 billion.

The amount was lower as the ERC’s calculation made use of the previous month’s actual fuel cost, while Meralco’s computations were based on forecasted fuel cost, ERC spokesperson Floresinda Digal said in an interview yesterday.

“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,” she said.

Digal, however, clarified the approved rate covers only the incremental fuel cost from the power plants affected by the Malampaya shutdown.

The generation charge could still go up taking into account the charges from the wholesale electricity spot market and from Meralco’s power supply agreements, she said.

To minimize the burden on consumers, Meralco filed an application with the ERC last Jan. 31 for the approval of the staggered recovery and payment of the differential generation charge.

In its petition, Meralco said natural gas plants will be running on alternative fuels which are more expensive than the gas being supplied by the Malampaya natural gas facility, which underwent maintenance from Jan. 28 to Feb. 16.