By Claire-Ann C. Feliciano, Reporter
Posted on January 09, 2014 11:16:27 PM
A DEFERRED power rate hike hanging over consumers’ heads could more than double as Manila Electric Co. (Meralco) yesterday estimated a hefty rise in this month’s generation charge.
“For the January billing, Meralco will bill the generation rate at [the November level of] P5.67/kWh in deference to the SC TRO (temporary restraining order),” Meralco spokesperson Joe R. Zaldarriaga said in a briefing.
“However, the preliminary billings from the power suppliers and WESM (Wholesale Electricity Spot Market) indicate the January generation charge translates to P10.23/kWh,” he added.
Larry S. Fernandez, Meralco utility economics head, said: “The reason for the [estimated] increase is still the Malampaya shutdown, which crossed two billing periods, coupled with scheduled, extended and forced outages of generation plants in December.”
“Spot market prices also remain to be elevated.”
He said that sustaining the generation charge at P5.67/kWh would result to a deferred generation charge of P8/kWh.
“[The overall deferred power rate increase] could still be higher because of transmission, taxes and other charges,” Mr. Fernandez added.
STAGGERED COLLECTION?
Asked how Meralco intended to collect, he replied: “We will address the balance of the uncollected pass-through charges for both December and January billings as may be directed by the SC and/or the ERC (Energy Regulatory Commission).”
He admitted that customers would likely again be up in arms -- complaints filed by consumer groups and party-list legislators led to the high court’s issuance of the TRO -- but added that oral arguments scheduled this Jan. 21 “will help everybody fully understand the situation.”
“We are sensitive to our consumers. Just like what we did last month, wherein we propose to stagger the [increase] ... perhaps we could still do that. But of course, we have to wait for the SC’s decision.” Mr. Fernandez said.
“We want to reiterate that Meralco does not earn from generation charge and other pass-through charges,” he added.
“For February 2014, we are currently monitoring the situation. At the moment, the situation looks to be stabilizing with Malampaya back online and other generation plants that were under scheduled, extended and forced outages.”
The shutdown of the Malampaya natural gas facility forced generators to use more expensive fuel, which Meralco said was the main factor behind the need to raise power rates by P4.15/kWh.
The increase -- a P3.44/kWh generation charge, P0.04/kWh transmission charge, P0.33/kWh for taxes and P0.34/kWh for other charges -- was approved by the ERC. It was to be spread out over three months: P2.41/kWh for December, P1.21/kWh in February and P0.53 in March.
The Supreme Court ordered the increase shelved last Dec. 23 and gave Meralco, the ERC and the Department of Energy up to Jan. 8 to reply to the complaints.
RATE HIKE DEFENDED
Meralco, in its 139-page comment, argued that the P4.15/kWh rate increase was consistent with rules on the automatic adjustment of generation rates (AGRA), issued by the Energy department and ERC as quasi-legislative bodies.
“Moreover, the automatic adjustment mechanism ... is essential to the power industry considering the necessity of addressing the demand for electricity on a real time basis,” the utility said.
“At any given rate ... all automatic adjustments are always subject to post-verification process by the ERC.”
Meralco also rejected the National Association of Electricity Consumers for Reforms, Inc. and other petitioners’ claim for a refund, saying this would be unfair. The utility said it only collects pass-through costs that go to power producers (for the generation charge), National Grid Corp. of the Philippines (for the transmission charge), and national and local governments (for taxes).
“Meralco gains no revenue to benefit from the collection of these pass-through charges,” it said.
The utility claimed that party-list legislators also failed to provide proof that Meralco colluded with power producers in the simultaneous shutdown of power plants that led to the rate hike.
The ERC, for its part, maintained that its approval of the adjustment was allowed by law. “It cannot be said that ... ERC committed grave abuse of discretion ... because it had the legal basis to do so,” the regulator said in a 71-page comment.
“The AGRA Rules, upon which such granting was anchored, stood as a good and valid law as the same has not been the same has not been judicially set aside.”
MORE ASKED TO COMMENT
The high court, meanwhile, denied the Office of the Solicitor General’s motion that the government be excused from the case, setting a new Jan. 17 deadline for the submission of comments.
It also ordered the petitioners versus the rate hike to include power producers in the lawsuit by Jan. 13, noting that these firms were the ones supplying Meralco with electricity.
“Public records show that SEM-Calaca Power Corp., Masinloc Power Partners Corp., Therma Luzon Inc., San Miguel Energy Corp., South Premiere Power Corp., and Therma Mobile Inc., ... supplied Meralco with power during November 2013 when the generation costs increased,” a five-page order stated.
It said the WESM operator, Philippine Electricity Market Corporation (PEMC), should also be impleaded.
PEMC and the power firms were given until Jan. 20 to submit their comments.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- with M. F. E. Flores source
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