MANILA, Philippines– Amid concerns of more price spikes next month, the Energy Regulatory Commission (ERC) ordered Manila Electric Company (Meralco) in Friday not to implement further increases on its generation charge for January 2014.
ERC ordered Meralco to maintain the January 2014 generation charge at P7.37 per kwh, which is the original estimate submitted to the commission after the power firm said the actual figures could be higher than P7.37 per kwh.
In an order dated December 20, ERC was reacting to a letter from the country’s power distributor expressing its concerns on the possibility that it might have to raise its generation charge for next month.
The order was signed respectively by four commissioners headed by chairman Zenaida Cruz Ducut and members of ERC namely: Alfred Non, Josefina Patricia Magpale-Asirit and Gloria Victoria Yap Taruc.
The deferment order also modifies the earlier clearance granted to Meralco to impose a generation charge of P1 per kWh in its February 2014 billing and P0.44 per kWh in its March 2014 billing, to recover the generation cost it deferred in its December 2013 billing.
Moreover, ERC cited the severe impact that any further adjustment may cause to the consumers within the franchise of Meralco and invoked the exception clause under its Automated Generation Rate Adjustment Rules, which states that the Commission may allow an exemption from any provision of these Rules, if such is found to be in the public interest and is not contrary to law or any other related rules and regulations.
The order further emphasized that while Meralco is able to implement adjustments in its generation charge, ERC will still undertake a confirmation process that will safeguard the generation charges that will be passed on to its consumers.
However, Energy Secretary Carlos Jericho Petilla said the order does not change Meralco’s staggered billing system for the P3.44 per kwh increase in the December generation charge.
“That only applies to the December supply month which is applicable on the January billing. That does not affect the previous order of staggered payments which covers the December billing,” Petilla said.
Malampaya shutdown concerns
Meanwhile, Meralco president Oscar Reyes said he was concerned over the remaining impact of the Malampaya shutdown on the power rates.
The Malampaya shutdown started November 11 but Meralco’s billing period covers the November 26 to December 25 billing.
“We are concerned with that estimate. We will use the actual generation charge (on the January generation charge) and there will be no additional or reduction in the charges,” Reyes said.
“Even as we may expect the generation cost and the WESM (Wholesale Electricity Spot Market) charges, volatile as they are, to drift down to more normal levels in March 2014, rendering this a temporary blip for now, we are still challenged by new/additional power outages which have risen in the last two weeks in the January billing,” Reyes added.
Reyes further said Meralco is open to any investigation regarding allegations of collusion but is only waiting for the regulators to come up with the findings.
He said it would be up to the government to decide what to do if and when the allegations are proved true but assured that Meralco consumers can always demand a refund if necessary.
The Energy Department has vowed to come out with the result of its investigation by December 30.
Malacañang commended on the ERC order which considered it an indication of the regulator’s readiness to listen to different sectors, particularly consumers.
“The ERC order appears to respond to calls from legislators, consumer groups and other stakeholders to validate the basis for Meralco’s generation charge that is used as basis for computing power rate adjustments,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said.
“We reiterate the government’s determination to prevent abuse of market power and protect consumer welfare,” Coloma added.
However, for Rep. Elpidio Barzaga Jr. of Dasmariñas City in Cavite, the ERC order meant nothing.
“It’s an empty gesture. In the first place, ERC did not approve any adjustment for January. What they told us in the committee on energy of the House of Representatives is that Meralco’s increase of P4.15 per kilowatt-hour would be spread over three months: this month, in February and in March,” Barzaga said.
“Their statements were that the three installments would be one-time payments, meaning the December increase will not be billed in January, the February adjustment will not be collected in March and the March increase will disappear in the April bills. Therefore, there is clearly no additional collection for January,” he added.
Barzaga stated that the ERC order could only mean that there might be an increase for next month that officials of both the commission and Meralco have not revealed to the public and to the House energy committee.
He further stated that ERC should have first examined the details and justifications of every centavo increase in electricity rates before approving it.
“They (ERC) failed in their mandate to protect the interest of the people,” he stressed.