Power industry stumped over price hike

FILE PHOTO

MANILA, Philippines–Industry players will attempt to figure out how to share the pain of the deferred power rate hike for customers of the Manila Electric Co. (Meralco) and prevent potential outages amid tightening electricity supply.

Energy Secretary Carlos Jericho Petilla said in a phone interview that he had summoned key officials of Meralco, power generation firms, and the Philippine Electricity Market Corp. (PEMC), which operates the Wholesale Electricity Spot Market (WESM), to a meeting Thursday.

“It is also the day when PEMC collects from Meralco,” Petilla said. “The Supreme Court TRO (temporary restraining order) must be implemented. I called the meeting to come up with an interim agreement and a way to share the costs, at least.”

Normally, Meralco collects the power generation and other pass-on charges automatically from customers and remits these to its electricity suppliers.

However, the Supreme Court issued a TRO on Monday which stopped Meralco for 60 days from collecting the increase in power generation and related pass-on charges. A complication arises as the distribution utility faces about P9 billion in dues to energy suppliers this month—of which about P6 billion is due tomorrow to PEMC. The rest are due to Meralco’s power suppliers with bilateral contracts.

Short circuit

Energy experts say that simply stopping Meralco from collecting the power hike, without additional intervention, could short circuit the energy market. If Meralco, unable to collect from customers, fails to pay dues to PEMC it could lose membership in the WESM. If this happens, Meralco would be unable to source power from the spot market as needed and that situation could result in power outages in Meralco areas.

Meralco, for its part, has also said it will abide by the TRO and will refund customers what they had paid for the generation rate increase (plus taxes and other related charges) in their December dues. The country’s largest distribution utility also sought help from regulators on how to get “clarity” of its situation. However, the long-term solution to power price woes, Meralco officials said, is additional capacity through new power plants.

The Energy Regulatory Commission (ERC), on the other hand, said it will abide by the Supreme Court decision. “In the meantime, we have continued with the investigation on the cause(s) of the upward adjustment of the November and December (power) generation charges,” ERC said in a statement.

As for Meralco’s appeal for regulators to prevent suppliers from collecting receivables amid deferred collections from end-users, ERC commissioner Josefina Patricia Magpale-Asirit said the body did not act on it in light of the court’s TRO.

“The DOE has called them to a meeting and the issue of Meralco’s payments to power suppliers could be addressed,” Asirit said in a phone interview.