The Energy Regulatory Commission said Monday it will spread the Supreme Court-ordered power rate increase amounting to P22.64 billion over a three year period.
The Supreme Court earlier allowed Manila Electric Co. “to collect the price increase in November 2013 on a staggered basis as proposed by Meralco and approved by ERC for the protection of consumers.”
ERC chairperson Monalisa Dimalanta did not provide the estimated impact of the SC decision on power rates, but said it would take effect next year.
“I already asked for a computation. We’re working on the timing. Actually, the IEMOP [Independent Electricity Market Operator of the Philippines] has completed the simulation, so likely we will have a two-year, three-year spread,” Dimalanta said.
Dimalanta said the rate impact would be significant, so the commission was looking at spreading the cost recovery over a three-year period.
“It’s significant. Definitely, we cannot do it in one year. Two years is still huge, so three-year spread,” she said.
Dimalanta said the ERC would issue an order giving IEMOP the authority to collect from consumers.
“Not all gencos [generation companies] have claims. Some will even have to pay. The situation is different for each genco,” she said.
The Supreme Court issued a ruling last year nullifying the ERC order imposing regulated prices at the Wholesale Electricity Spot Market for the supply months of November and December 2013.
The ERC implemented regulated pricing to mitigate the impact of the high WESM rates on consumers. This also prompted the ERC to also conduct an investigation after allegations of collusion and market abuse at the WESM surfaced.
The SC voided the ERC order imposing regulated prices, pending the result of its investigation over allegations of market power abuse.
Meralco head of regulatory management Ronald Valles earlier said the staggered collection “would be a big win for consumers, especially if that would be implemented today when fuel prices are skyrocketing.”