MANILA -The Energy Regulatory Commission (ERC) has allowed power distributor Manila Electric Co. (Meralco) and Panay Energy Development Corp. (PEDC) to recover from their consumers nearly P900 million in losses despite the termination of the companies’ power supply agreement (PSA).
ERC Chair Monalisa Dimalanta explained, however, that there would be “no immediate rate impact,” as the commission has yet to review Meralco’s recovery petition.
In a March 8 decision released on Aug. 29, the ERC granted Meralco and PEDC’s joint motion for a contract price adjustment due to high fuel costs, which was recognized as a valid “change in circumstance” under their PSA signed in December 2021.
This resulted in P884.55 million in losses for PEDC as of September last year, according to the ERC.
At the same time, the ERC granted their plea to terminate the PSA, citing PEDC’s “inability to meet its contractual obligations by virtue of the losses” mentioned.
Under the 2021 PSA, PEDC provided 70 megawatts of capacity from its coal-fired power plants in Iloilo province at P2.3309 per kilowatt-hour (kWh) from April to December 2022.
The two companies filed on April 13 last year a joint urgent motion for contract price adjustment, saying that actual fuel costs were more than double the assumed price of $111.01 per metric ton (MT), which was based on the global average back when PEDC submitted its bid documents in September 2021.
The ERC will compute the price adjustment.