Meralco eyes staggered collection of P5.33-per-kWh rate hike in January

Business Mirror

06 Feb 2014 

 

Written by Lenie Lectura with InterAksyon.com

Manila Electric Co. (Meralco) is preparing a new petition seeking to collect—albeit on a staggered basis—a rate increase for the January billing period.

Lawyer William Pamintuan, Meralco first vice president and head of legal services, said the company plans to stagger collection of last month’s P5.33 a kilowatt-hour (kWh) increase to soften the impact on customers who are bracing themselves for higher rates with the upcoming summer season.

“Isasama na doon sa konsiderasyon na posibleng mataas ang cost pag summer months. I-spread out namin ng mabuti ’yung staggering in such a way na hindi makakasakit sa consumer,” Pamintuan said.

Meralco’s plan to collect the January increase stemmed from Supreme Court Associate Justice Marvic Leonen’s statement that the temporary restraining order (TRO) issued last month didn’t cover the January increase.

The Court earlier issued the TRO in response to a petition by non-governmental organizations seeking a halt to the record increase in the generation charge, which Meralco collects on behalf of its power suppliers.

The generation charge, which is the cost power bought from Meralco suppliers, shot up starting November, following the maintenance shutdown of the Malampaya natural-gas platform and unscheduled shutdowns by major power plants.

Repairs at the Malampaya, which accounts for 40 percent of the Luzon grid’s electricity requirements, forced power plants running on the field’s natural gas to resort to more expensive fuel.

Meralco has power-supply agreements with these plants, thus the higher fuel cost also jacked up the cost of power supplied by the country’s largest electricity distributor.

Compounding this was the unscheduled shutdown of a number of power plants that caused an uptick in prices at the Wholesale Electricity Spot Market (WESM), where Meralco sourced part of its requirements.

Pamintuan said Meralco is awaiting a former clarification from the Supreme Court that the January rate increase is not covered by the TRO.

“’Yung P5.33 per kWh na hindi kinolekta sa January billing, bagama’t may deklarasyon si [Justice Leonen] sa oral arguments, hihingi pa rin kami ng formal clarification from the Court kung talagang ’yun nga ang dapat na interpretasyon ng TRO,” Pamintuan said.

Before Leonen made that remark, Meralco had been working from the assumption that all increases starting December was covered by the TRO.

“’Yung TRO noong November, P9.10. ’Yung sinasabi na hindi kasama ngayon ’yung P10.22, mas mataas kaya parang nahihirapan kami na i-interpret siya that way, na puwedeng implement na namin ang mas mataas na gen charge,” Pamintuan said.

WESM ‘violations’

Meralco has asked the Energy Regulatory Commission (ERC) to order market operator, Philippine Electricity Market Corp. (PEMC), to recalculate the November and December generation charge to determine if some power producers violated the WESM rules.

“We are asking ERC to review the WESM market pricing for the period November and December 2013 in view of the information that were revealed during the Senate and House hearing that certain power plants have violated WESM rules when they did not comply with must-offer rule or when they offered but were not dispatched,” said Pamintuan when sought to explain the Meralco’s 12-page Omnibus motion with manifestation which was received by the ERC on February 3.

 In its motion, Meralco asked the ERC to direct PEMC “to conduct market reruns or recalculations of WESM transactions and dispatches, or determine substituted prices or undertake any other appropriate measures to determine and recalculate the true cost of electricity in the WESM, during the November and December 2013 supply months [Meralco’s December 2013 and January 2014 billing months] under such rules or guidelines as the honorable commission may deem appropriate.”

 If Meralco’s motion is granted, Pamintuan said the ERC can order a recalculation of the WESM pricing to reflect what should have been the correct actual pricing during those two months, which, Pamintuan said, may be lower than what were billed by PEMC and power-generating companies to the Meralco and other distribution utilities.   source