ERC ruling prompts power rate cut, but more hikes coming

Inquirer file photo

MANILA, Philippines — Power distributor Manila Electric Co. (Meralco) will cut its rate by P1.9623 per kilowatt-hour (kWh) in June, instead of increasing it by P0.6436 per kWh as announced earlier.

Meralco announced the reduction after the Energy Regulatory Commission (ERC) allowed power distributors and cooperatives to settle their Wholesale Electricity Spot Market (WESM) purchases in May on an installment basis.

As a result of the ERC’s order, the generation charge decreased by P1.8308 per kWh.

READ: Meralco bills tipped to go up in June

The cut brings the overall rate to P9.4516 per kWh for June from P11.4139 in May, a decrease of about P392 in the electricity bill of residential customers with a monthly consumption of 200 kWh.

But Joe Zaldarriaga, vice president and corporate communications head of Meralco, said the delayed payment of WESM purchases will still have to be paid in four monthly installments until September.

Higher generation rates

“We would like to advise this early that our customers can expect generation charge to increase in succeeding months as we collect the deferred amounts on a staggered basis as a result of the recent developments,” he said.

“With these already deferred costs, and the recent order of the ERC to also stagger the collection of WESM charges, around P0.77 per kWh will be added every month to the generation charge in the July to September bills,” he added.

Meralco said the delivery of current electricity bills will be delayed following the order of the ERC, which issued the directive to help consumers with high WESM exposure amid the recent heat waves that caused power outages in Luzon, Visayas, and Mindanao.

As a result, red and yellow alerts were raised in Luzon and Visayas grids as they were unable to meet electricity demand.

Due to WESM ops

This prompted the ERC to suspend WESM operations in both grids and all transactions related to the sale of electricity will have to be paid by power companies and not consumers.

In a separate development, the ERC affirmed its previous decision ordering Meralco to refund a total of P21.769 billion, or an average refund rate of P0.4790 per kWh, in overcharges to its customers.

With a 3-2 vote, the June 14 ERC order affirms its 2022 decision approving Meralco’s refund scheme. Meralco had already settled the refunds even before the ERC decision.