For DOE exec, Meralco deal could have been better

INQUIRER.net FILE PHOTO

MANILA, Philippines—Manila Electric Co. (Meralco) did well when it decided to stagger its deferred rate hike in January over six months, but for Energy Secretary Carlos Jericho Petilla, it would have been better had the power distributor decided on a longer implementation period.

“For me the longer, the better. Six months is actually fair, but if they can do it even longer, (that would be) even better as long as there is no interest (charge),” Petilla said.

However, Petilla noted that it would be up to the Energy Regulatory Commission (ERC) to decide on the implementation.

Meralco said it submitted to the ERC on March 25 a petition asking the quasijudicial body to let the company collect P0.45 per kilowatt-hour (kWh) in generation cost increases reflected on the January 2014 bills of customers. Meralco proposed that the total collection, estimated at P1.31 billion, should be broken down in six monthly installments so that customers would only have to bear P0.0751 per kWh a month.

In effect, the application was an amendment of Meralco’s original petition on Feb. 17 to stagger the increase of P4.56 per kWh in January over six months. Meralco just recently recalculated the increase and came up with P0.45 instead—about a tenth of the original amount.

According to Meralco, the application “is without prejudice to any further adjustments” as may be approved by the ERC, as well as to the recovery of additional amounts as may be later directed by the commission pursuant to its Order dated March 3 to make “payment to the oil-based plants of additional compensation to cover their full “fuel and variable O&M costs,” or operation and maintenance costs, if warranted.

Noting that the generation rate is a pass-through charge, Meralco assured customers that the computation of the generation charge would be transparent and that whatever adjustment resulting from the ERC’s decisions would be fully reflected on customers’ bills.

ERC’s acting spokesperson Floresinda Baldo-Digal said in a phone interview that from the time Meralco’s petition was filed, the commission would be able to act on it “as early as 30 days or up to 75 days after filing.”

The change in the deferred power rate hike for January stemmed from the ERC’s March 3 order voiding what it called unusually high and “unjustified” Wholesale Electricity Spot Market (WESM) rates for the supply months of November and December 2013. Meralco customers normally feel the impact of rate increases a month after the supply month.

On March 18, the Philippine Electric Market Corp. cut WESM rates for the November and December 2013 supply months by nearly 80 percent. The spot market operator issued a new bill for Meralco’s December 2013 supply month, which reflected on customer bills for January 2014.

PEMC did not bill Meralco for November, which was reflected in the December 2013 Meralco bill. But Meralco could not bill customers for the rate hike in December due to an extended Supreme Court order barring any rate hike collection for Meralco customers.

Later, a confluence of events resulted in a record generation charge hike of P4.15 per kWh in the December bill of Meralco customers, coming from the P5.67 per kWh in November. This outraged various groups, which took the matter to the Supreme Court.

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