THE Energy Regulatory Commission (ERC) is set to release an order that would effectively increase electricity rates brought about by a 2022 Supreme Court decision that nullified the agency’s 2014 order regulating the prices in the Wholesale Electricity Spot Market (WESM) for November to December 2013 supply months.
“We have already made the computation. I don’t want to release a number yet, but we are actually finished. It was Iemop [Independent Electricity Market Operator of the Philippines] that made the simulations. It is likely that we will have a two year, three-year spread,” said ERC Chairperson Monalisa Dimalanta.
The amount that could be passed on to customers based on previous estimates when the SC released its July 2022 decision is estimated at anywhere from P17 billion to P22.4 billion.
“Yes, it’s a huge amount. Definitely, it can’t be implemented in one year or two years. So, it’s likely a three-year spread,” said Dimalanta, while adding that implementation could start next year.
It may be recalled that the ERC capped the WESM prices in those two months of 2013 to address the abnormal spike and unreasonable prices of electricity imposed by power generation companies (gencos), which were being probed for alleged price manipulation in the spot market during the maintenance shutdown of the Malampaya gas facility.
From an estimated P24 billion, the impact to consumers brought about by very high WESM rates was reduced to P7 billion because of the ERC order.
WESM is the country’s trading floor for electricity.
However, the SC said that the ERC order was issued even if the agency was still in the process of completing its findings on the possible abuse of market power.
The SC added the ERC failed to notify the affected parties about its probe, which violated the gencos’ right to due process.
“The March 3, 2014 order acknowledged that it was based on an unfinished investigation, and yet it included a fallo (decision) voiding the Luzon WESM prices and imposing regulated prices instead,” the SC had said.
The same SC decision upheld the ERC order allowing the Manila Electric Company (Meralco) to implement a staggered collection of automatic rate adjustments arising from generation costs for November 2013.
Meralco informed the ERC that the total cost of generation to be passed on customers amounted to P22.64 billion, equivalent to a generation charge for December 2013 billing of P9.1070 per kwh, which is an increase of P3.44 per kwh from the P5.67 per kwh that was billed in the previous month.
The SC voided the ERC order to impose regulated prices during the same period in 2013 pending result of its investigation over allegations of market power abuse.
SC-voided ERC order means ₧22.4-B burden
Source: News Paper Radio
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