‘Huge’ power generation cost to be recouped over 3 years

MANILA  -A Supreme Court ruling that allowed the staggered recovery of P22.64 billion in power generation costs would likely be implemented over a three-year period starting next year, the Energy Regulatory Commission (ERC) said.

The amount amount would be collected from customers of power distributor Manila Electric Co. (Meralco) and other distribution utilities and electric cooperatives in Luzon.

“We are mindful of the timing,” ERC Chair Monalisa Dimalanta said. “The amount to be recovered from customers is huge and cannot be recovered in one or two years. It will be spread in three years.”

The ERC computed the amount based on simulations made by the Independent Electricity Market Operator of the Philippines (Iemop).

“We might issue an order because Iemop needs the authority to collect,” she said.

Dimalanta, however, said that not all generation companies (gencos) would be entitled to generation cost recovery.

“It will be collected from customers but not all gencos have claims. Some of them need to pay. Their situation varies,” she added.

The SC had affirmed the 2013 order issued by the ERC that authorized Meralco to collect generation costs totaling P22.64 billion or P9.107 per kilowatt-hour (kWh).

According to the high court, the ERC did not commit grave abuse of discretion” in approving Meralco’s collection of its generation rate in tranches.

“Instead of evading its positive duty, the ERC, in fact, acted in such a manner that is compliant with the law, and the rules and regulation applicable,” the 32-page SC decision read.

However, the SC nullified the ERC’s 2014 order that imposed regulated prices of the Wholesale Electricity Spot Market. INQ