Meralco to implement rate hike from plant outages
By Myrna M. Velasco – November 6, 2022, 9:45 PM
from Manila Bulletin
Rate hikes induced by simultaneous outages of power plants in 2013 will soon be reflected in the electric bills of customers of Manila Electric Company (Meralco), in compliance to a final ruling by the Supreme Court.
Meralco First Vice President and Head of Regulatory Affairs Jose Ronald Valles indicated that the company will be seeking guidance from the Energy Regulatory Commission (ERC) on how the staggered rate hike will be carried out, including the timeframe of the pass-on of P22.64 billion worth of cost recoveries as mandated in the high court ruling.
“We are now coordinating with the ERC on the implementation of the Supreme Court decision,” the Meralco executive stressed.
He expounded that the SC had already issued the final verdict on the case, after denying the motions for reconsideration and partial reconsideration sought by the petitioners, “on the ground that the issues raised had already been passed upon, so no further pleadings will be entertained.”
To recall, the shutdowns of power plants happening at the same time in November 2013 which also coincided with the maintenance downtime of the Malampaya gas production facility, caused high settlement prices at the Wholesale Electricity Spot Market (WESM).
But instead of the consumers being shielded from unjustified rate hikes and the erring generation companies (GenCos) getting penalized, it will be the power plant owners that will now be “rewarded with financial bounty” via the rate increases that will be passed on in the Meralco bills.
Relative to the series of investigations carried out to determine whether or not collection of the charges had been warranted, the power companies that have experienced simultaneous outages on their generating facilities were also probed for “market collusion” allegations – because that “perfect storm” episode in the power system triggered spikes of up to P64 per kilowatt hour (kWh) in offers at the spot market.
To date, the investigation of the ERC on the power plant shutdowns and the alleged collusive acts of the generation companies has yet to be concluded.
In December 2013, it was calculated that the resulting upward adjustment in the rates because of the combined forced and scheduled outages of the power plants had been at P4.15 per kilowatt hour (kWh) and should have been reflected in the bills by January 2014.
Nevertheless, a temporary restraining order (TRO) was then issued by the SC; and the ERC subsequently enforced in March 2014 a “regulated settlement prices” for the WESM-traded capacities within the supply month in question.
In the high court decision, it similarly voided the ERC order which imposed the “regulated” spot market prices.
In particular, the Supreme Court had delegated to the ERC the authority to set the terms how the deferred charges will eventually be passed on in the electric bills of the Meralco customers.
For the December 2013 billing, the scale of cost recoveries logged by Meralco then was at P9.7 billion, while P12.94 billion had been posted for November 2013 billing cycle.
