Meralco seeks staggered January rate hike
AFP FILE PHOTO
MANILA, Philippines — The Manila Electric Co. (Meralco) has asked the Energy Regulatory Commission to approve its plan to stagger the deferred power rate increase in January over six months.
In a petition filed on Tuesday (March 25) with the Energy Regulatory Commission (ERC), Meralco asked the quasi-judicial body to let the company collect P0.45 per kilowatt-hour (kWh) in generation cost increases that impacted the January 2014 bills of customers. The total collection, which Meralco estimated at P1.31 billion, could be implemented over six months so that customers would only have to bear P0.0751 per kWh.
The application amends Meralco’s original petition (filed February 17, 2014) to stagger an increase of P4.56 per kWh in January over six months. Meralco just recently recalculated the increase and came up with P0.45 instead, or about a tenth of the original amount.
Meralco said that it would wait for the ERC’s ruling on the matter before implementing any staggered collection.
Meralco said this application would be “without prejudice to any further adjustments” as might be approved by the ERC, as well as to the recovery of additional amounts as might be later directed by the Commission pursuant to its Order dated March 3, 2014 to make “payment to the oil-based plants of additional compensation to cover their full ‘Fuel and Variable O&M Costs’ or operation and maintenance costs, if warranted.”
Article continues after this advertisementThe company has repeatedly stressed that the generation charge is a pass-through charge. It also assured its customers that the computation of the generation charge has always been and would continue to be transparent and that whatever adjustment that would be made to it as a result of the ERC mandated recalculation would be fully reflected in their bills.
Article continues after this advertisementERC’s acting spokesperson Floresinda Baldo-Digal said in a phone interview, “We have not yet received Meralco’s amended petition. From the day the document is filed, the commission can act on it as early as 30 days or up to 75 days after filing.”
The change in the deferred power rate hike for January stemmed from the ERC’s March 3 order voiding what it called unusually high and “unjustified” Wholesale Electricity Spot Market (WESM) rates for the supply months of November and December 2013. Meralco customers normally feel the impact of rate increases a month after the supply month.
On March 18, the Philippine Electric Market Corp.’s (PEMC’s) cut WESM (wholesale electricity spot market) rates for the November and December 2013 supply months by nearly 80 percent. The spot market operator issued a new bill for Meralco’s December 2013 supply month, which would reflect on customer bills for January 2014. PEMC did not bill Meralco for the supply month of November, which would reflect in the December 2013 Meralco bill. This is still under an extended Supreme Court order barring any rate hike collection for Meralco customers.
On March 20, Meralco said the new rates meant the generation charge (a line item in customer bills) for January 2014 was at P6.12 per kWh, down from the original level of P10.23 per kWh. Meralco only collected P5.67 per kWh in January (the same rate collected in December 2013) even though there was no TRO in force for the first month of 2014.
All of these changes stemmed from the tight power supply situation during the shutdown of the Malampaya natural gas facility from November 11 to December 10, 2013. During that time, Meralco had to source more power from WESM just when unplanned outages in several power plants caused price spikes. This price burden added to the higher cost of power generation by natural gas plants normally supplied by Malampaya but had to turn to alternative fuel.
The confluence of factors resulted in a record generation charge hike of P4.15 per kWh in the December bill of Meralco customers, coming from the P5.67 per kWh in November. This outraged various groups, who then questioned the rate hike at the Supreme Court. On December 23, the High Tribunal issued a TRO barring any rate hike collection. As a result, Meralco maintained the P5.67 per kWh rate for December. Come January 2014, Meralco again maintained the P5.67 per kWh generation charge to avoid another major increase.
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