Meralco residential customers to continue enjoying discount

MANILA, Philippines - Power sector watchdog Energy Regulatory Commission (ERC) yesterday said residential customers will continue to enjoy the mandatory 30 centavos per kilowatthour (kWh) rate reduction even if the power plants of the National Power Corp. (Napocor) were privatized.

In a resolution, ERC clarified that the Mandatory Rate Reduction (MRR) of 30 centavos per kWh granted under Section 72 of the Electric Power Industry Reform Act of 2001 or Republic Act 9136 shall continue to be given to residential customers even if their distribution utilities (DUs) are sourcing their power from Successor Generating Companies (SGCs) or those buyers of Napocor plants under Transition Supply Contracts (TSCs) assigned and transferred to these SGCs.

The said ERC Resolution is an offshoot   to the petition filed by Masinloc Power Partners Co., Ltd. (MPPCL) to initiate rule making in relation to an ERC resolution.

Section 72 of the Electric Power Industry Reform Act (EPIRA) provides that upon effectivity of the EPIRA, residential end-users shall be granted a rate reduction from Napocor rates of 30 centavos per kWh. 

The commission pointed out that such reduction shall be reflected as a separate item in the consumer billing statement.

According to ERC, TSCs are supply agreements between Napocor and its DU customers mandated by the EPIRA, which can be assigned to buyers of Napocor plants or the SGCs.

Under the resolution, the cost of implementing the MRR for the duration of the term of the assigned TSC shall be borne by Napocor and/or PSALM (Napocor and/or Power Sector Assets and Liabilities Management Corp.).

However, the ERC explained that the SGC may, by a written instrument, assume this obligation.

On the other hand, the commission said that in cases where an SGC shall continue to supply the requirements of the affected DU under an extension as allowed by the ERC of the assigned TSC’s term, the obligation to provide the MRR shall cease, unless otherwise stipulated upon by the SGC and the affected DU.

The ERC noted that in such case, the cost of implementing the MRR shall be borne by the SGC.