Meralco asks SC to junk Nasecore petition

The Manila Electric Co. (Meralco) said yesterday that it will ask the Supreme Court to dismiss the petition filed by the National Association of Electricity Consumers for Reforms (Nasecore) on the power utility’s rate hike.

Nasecore earlier sought the High Tribunal’s help to stop Meralco from implementing the order of the Energy Regulatory Commission (ERC) allowing the power firm to recover the cost already advanced to the power producers under the so-called generation rate adjustment mechanism (GRAM).

Meralco vice president and legal department head Gil San Diego said there is no basis for Nasecore to ask the Supreme Court to nullify the 13.27-centavo adjustment in Meralco’s generation charges on grounds of failure of publication in a newspaper of general circulation or absence of comments the local government units.

Unlike a petition or application for a rate increase, the GRAM is a system adopted by the ERC by which the distribution utilities (DUs) recover the costs of power they have paid to power producers.

San Diego said the ERC has been given the opportunity to examine the amounts sought to be recovered and ensure that the recovery is in order.

The Meralco official added it is now part of an established process of paying the distribution utilities periodically for the amount it had advanced or the costs it had incurred for providing distribution utility services.

"In short, the distribution utility pays the power producers up front and the distribution utility in turn collects the payment it advanced to the power producers for the consumers. But before the distribution utility is able to collect the amount it advanced, the ERC examines the amount that the DU seeks to recover to make sure the recovery is in order," he said.

San Diego pointed out that the application under the GRAM is merely for the recovery of the payment the Distribution Utility already advanced to the power producers for the consumers.

"It is not an application for a rate increase. The application for a rate increase is the one which necessitates the publication of notice to any newspaper with general circulation and notices to the different local government units," San Diego said.

"Any adjustment under the GRAM is revenue-neutral insofar as Meralco is concerned. Absolutely none of the entire amount goes to Meralco. In fact, Meralco advances the payments for the electricity it sources from power producers and waits for three months to one year before recovering these generation costs from consumers," he said.