Philippines: ERC reviewing Meralco's power hike bid

Philippines: ERC reviewing Meralco's power hike bid

THE ENERGY REGULATORY COMMISSION (ERC) IS SET TO DECIDE ON MANILA ELECTRIC
CO.'S (MERALCO) PETITION TO STAGGER THE P0.92 PER KILOWATT-HOUR RATE
INCREASE CAUSED BY THE 20-DAY MALAMPAYA MAINTENANCE.

"We know the urgency of Meralco's application and we are already reviewing
it," ERC chairman Jose Vicente Salazar said.

The power retailer asked the ERC to approve the rate increase, divided into
P0.30 per kWh in March, P0.30 per kWh in April, and P0.32 per kWh in May to
soften the impact on consumers.

"To mitigate the effect of the abrupt increase in generation costs due to
the use of liquid fuel, especially considering that the WESM [Wholesale
Electricity Spot Market] prices may also increase during the period, Meralco
proposes that instead of reflecting the full incremental incremental fuel
cost component of the total generation costs in the March 2017 generation
charges, it be allowed to implement the increase in three billing months
starting March until May 2017," Meralco said.

On the other hand, Bayan Muna Rep. Carlos Isagani Zarate asked the ERC to
junk Meralco's bid.

"What specific provision in the power supply agreements (PSAs) of Meralco
with the generation companies would justify 'capacity fee adjustments'? Is
this a yearly adjustment? Or it is just an unfortunate incident that always
coincides with Malampaya's shutdown?" Zarate asked.

"Appallingly, while our poor people will be burdened once more with these
price hikes, we are yet to be fully apprised on the results of the ERC
investigation on the alleged collusion of generation companies and Meralco
during the 2013 November-December Malampaya shutdown," he added.

The Malampaya maintenance drove natural gas power plants to use alternative
fuel like diesel, which is more expensive at P6 to P8 per kWh. Natural gas
is priced at P4 per kWh.

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Link to Original Article:
http://powerphilippines.com/2017/02/23/erc-reviewing-meralco-power-hike-bid/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com