ERC’s laudable decision

Business Mirror

18 Mar 2014

ELECTRICITY consumers can now heave a sigh of relief, thanks to the laudable decision of the Energy Regulatory Commission (ERC) that took into account all angles in that recent, lamentable spike in power-generation charges that had everyone hollering “Harang!” 
The decision, which skirted the issue of who is at fault, is deemed a welcome development, given the shocking billings that resulted from the P60-plus per-kilowatt-hour (kWh) increase in generation charges, which the Manila Electric Co. (Meralco) was to collect for the generation companies (gencos). 
The ERC effectively voided the November and December 2013 billings, though the pricing was supposed to have been insulated from any price-fixing, as it was ostensibly meant to show market forces at work. 
But were those forces at work then? 
That’s the crucial question the ERC has to answer, for it would seem that even the supposed price arbiter, the Philippine Electricity Market Corp. (PEMC), and the government, which failed to dispatch the Malaya thermal power plant in Rizal province, were to be faulted for that huge rate increase. 
So now Meralco is waiting for the recalculated billing charge that would show reduced energy prices at the Wholesale Electricity Spot Market (WESM), whose activities had resulted in the complained-of charges. 
The ERC order would now show WESM load weighted average prices of P6 to P7 per kWh from the original P15.523 per kWh last November and P17.749 per kWh last December. 
We understand that the ERC sought the side of Meralco, as well as of consumer groups, the gencos and the PEMC, before arriving at the decision to void the huge pricing, as it was deemed irrational. 
The ERC exercise effectively took into account the education of the public on the power-supply chain and the reassessment of developments with consumer welfare at hand. 
Understandably, Meralco is waiting for the effect of the ERC order that revised the WESM pricing formula. 
But it would be far lower than the P5.67-per-kWh increase initially set before the Supreme Court (SC) stepped in and issued the temporary restraining order that stopped Meralco from collecting the charges to be passed on to consumers. 
The SC decision is expected to mirror the ERC order, and that would mean that everybody would be happy. 
Although the issue of who is at fault remains up in the air, the fact remains that, at least, the hiked generation charges would no longer be included in the consumers’ Meralco billing. 
And one more thing, Meralco’s announcement that there would be a marked decrease in its billing this month that is equivalent to almost 50 centavos per kWh is another welcome development, given the tuition and other expenses that Juan de la Cruz has to pay.  source

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E-mail: hugagni@yahoo.com.