ERC chief returns to a Meralco rate hike dilemma

Energy Regulatory Commission (ERC) Chairperson and CEO Monalisa C. Dimalanta | PHOTO: Official Facebook page of ERC / Energy Regulatory Commission

Energy Regulatory Commission (ERC) chair Monalisa Dimalanta has returned to the grind after a two-month suspension, with her focus set on mounting cases, including addressing concerns over a possible rate hike in the Manila Electric Co. (Meralco) franchise area.

Dimalanta faced reporters during a virtual press conference on Monday, her first after Malacañang reinstated her as ERC chief following the Ombudsman’s decision to lift her suspension over her alleged failure to act on various petitions and complaints. She comes back to a backlog of over 3,000 cases.

During the briefing, the ERC executive said one of the cases she was studying was the rate reset application of Pangilinan-led Meralco, which caught the attention of some senators during a previous budget hearing due to the commission’s earlier decision to “forego” the fifth regulatory process (5RP).

READ: Ombudsman clarifies order lifting ERC chief suspension

Under a rate reset process, a regulated entity such as Meralco is obliged to submit to the ERC its spending and proposed projects over a period, usually 5 years unless extended by the regulator. This will then be the basis of the distribution rate that will be passed on to consumers.

Meralco’s last rate reset process, or 4RP, covered the July 1, 2015 to June 30, 2022 period. The latest petition, or 5RP, would cover Meralco’s spending for the years July 2022 to June 2026.

By “foregoing,” the current petition would lapse sans action from the regulator and current rates would be maintained until the next rate is approved.

Senator Win Gatchalian believes, however, that this was not the case. He said that without ERC studying the matter, Meralco’s charges may result in increased costs for both households and businesses.

Gatchalian’s concerns prompted the commission to reevaluate its earlier ruling and make necessary modifications.

“Given its market power and status as a natural monopoly in NCR (National Capital Region) and nearby areas, Meralco has to undergo a rate reset as well. Why require a rate reset if the ERC isn’t even conducting it? The regulator itself is not keeping up with the pace,” the lawmaker earlier said.

READ: ERC chair Dimalanta reinstated – Palace

Dimalanta confirmed that a decision to forego Meralco’s 5RP was made before she was suspended in August. She voted “not to forego” while three other ERC officials voted otherwise.

As she had just assumed office last week, Dimalanta said she needed to review the modifications made while she was gone.

“I’ve been looking for the minutes of the meeting and I haven’t seen what was the basis, what was the extent of the modification,” she said.

A Meralco official had said that once the ERC decision “lapses,” millions of its customers in Metro Manila and nearby provinces could expect about P16 billion worth of refunds.

Dimalanta noted she could not also find the discussion on this alleged refund.

“I’m looking for that, too,” she said.

Dimalanta added the ERC’s final ruling on the matter would be out “definitely within the year.”

Meralco’s franchise area covers Metro Manila, Bulacan, Cavite, Rizal and select areas in Pampanga, Laguna, Batangas and Quezon. INQ