by Myrna Velasco March 6, 2016
Power utility giant Manila Electric
Company (Meralco) has cited two main reasons for its P0.42 per kilowatt-hour
(kwh) rate hike in February, but the Energy Regulatory Commission (ERC) is not
biting.
ERC is inclined to evaluate deeper
the factors for the rate increase to establish whether such upward adjustment
in the electric bills had been “reasonable” or not.
In a letter to House Senior Deputy
Minority Leader Neri J. Colmenares, ERC Chairman Jose Vicente B. Salazar has
noted that “the Commission is currently evaluating the submissions of Meralco
in order to determine the reasonableness of the indicated rate increase.”
Colmenares constantly monitors rate
adjustments and other developments in the energy sector. In previous cases of
unwarranted electricity tariff hikes, the lawmaker went up to the Supreme Court
to question not just the veracity but the legality of ‘market circumstances’
triggering rate adjustments.
Upon ERC’s order, the power utility
firm has submitted its “Compliance and Manifestation” on the questioned rate
hike last February 16. Meralco was directed to set the “details and bases
of its computation relative to the February rate adjustment.”
According to Salazar, Meralco has
reiterated in its submission that “the increase in the generation charge was a
result of the P0.7562/kwh increase in the average rate of the power supply
agreements reckoned from the December 2015 to January 2016 supply months.”
He further stipulated “the
adjustment was allegedly the difference between the rates in the December 2015
supply month at P3.3863/kwh and the January 2016 supply month rate of
P4.1425/kwh.”
Salazar also cited Meralco’s
explanation that its power supply contracts with independent power producers
(IPPs) “provides for a true-up of the capacity fees every December of each year
to account for the unutilized outage allowance of the power plants for the full
calendar year.”
The ERC chief stressed, “Meralco
thus claims that the capacity charge is expected to increase once it normalizes
in the January 2016 supply month, which is the basis of the February billing
month to the customers.”
The Commission noted that it will
similarly examine the ‘replacement power provision’ in the utility firm’s power
supply contracts relative to the rate hike.
In the same letter, Salazar further
provided details on the application of the National Transmission Corporation
(TransCo) for adjustments in the feed-in-tariff allowance (FIT-All) for renewable
energy projects.
The universal charge recovery
application of Power Sector Assets and Liabilities Management Corporation
(PSALM) was similarly probed; as well as the filing of the National Power
Corporation for universal charge true-up for missionary electrification.
On PSALM’s petitions for UC stranded
debts and stranded contract costs, the ERC stipulated that the company has been
required to submit additional documents. “PSALM to date has asked for extension
– until March 11, 2016 – to submit the same,” the Commission said.
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