ERC: Power rate hike collection scheme above board

INQUIRER FILE PHOTO

MANILA, Philippines—The Energy Regulatory Commission (ERC) maintained that allowing the Manila Electric Company to implement a staggered collection of the P4.15 increase per kilowatt-hour was above board.

“It cannot be said that the ERC committed grave abuse of discretion when it granted respondent Meralco the clearance to implement the staggered collection of its generation cost because it had legal basis to do so,” ERC said in its 71-page comment to the Supreme Court which was made public Thursday.

ERC said the legal basis is Article III, Section 2, of the Guidelines for the Automatic Adjustment of Generation Rate (AGRA) and System Loss Rates by Distribution Utilities or the consolidated AGRA rules.

At the same time, the ERC pointed out that before granting generation costs charged by public utilities like Meralco, it goes through rigorous study.

“Essentially, the generation charges go through twice in the evaluation mill in order to ensure that what is recovered from the consumer is reflective of the purchased energy,” ERC said.

It added that there will also be confirmation and post verification process to be undertaken by the ERC despite approval of the staggered implementation of the power rate increase.

ERC added that they are also continuing their investigation on the behavior of market participants for possible collusion and market power abuse.

“Should the finding of the investigation yield that there was an anti-competitive behavior in the market committed by any of the market participants, this may result to a downward price adjustment…As a necessary consequence, the affected generation companies will be made to refund Meralco any excess payments they may have received,” ERC said.

The ERC has been accused by petitioners  Makabayan Bloc, the National Association of Electricity Consumers for Reforms, Federation of Village Associations, Federation of Las Piñas Homeowners Association and Rodrigo Domingo Jr. of conspiring with Meralco and other power generating company that led to the record high increase in electricity rate.