No power rate hike in next 2-3 months

MANILA, Philippines – There will be no power rate increase for the next two or three months as far as the performance-based rate (PBR) mechanism of the Manila Electric Co. is concerned, the Energy Regulatory Commission (ERC) announced.

In a statement, the ERC said Meralco’s application for the approval of distribution rates for the Second Regulatory Year under the PBR filed last April 1 will still undergo due process.

ERC chairman Rodolfo Albano Jr. said the application would also undergo public hearings before any decision is made.

“The application filed by Meralco will not have impact yet on the existing electricity rates for the next two months or longer as hearings and comprehensive evaluation are still to be undertaken prior to ERC’s issuance of provisional approval, if warranted,” Albano said.

Meralco’s application is based on the ERC-approved maximum average price (MAP) under the PBR methodology.

The MAP is comprised of historical electricity distribution rates and the expenditure forecasts of the distribution utility (DU) approved by the ERC to be included in the DU’s allowed annual revenue.

The ERC approved the amounts of P1.167 per kilowatt-hour and P1.260 per kWh for 2008 and 2009, respectively as Meralco’s MAP.

Albano said the translation of the approved MAP into distribution rates is now the subject of Meralco’s new application. The proposed distribution rates will be applicable for the Second Regulatory Period commencing on July 1, 2008.

Aside from Meralco, the Dagupan Electric Corp. (DECORP) and Cagayan Electric Power and Light Co. Inc. (CEPALCO) also filed applications for the translation of the approved MAP into distribution rates last March 31, 2008.

Albano said Meralco, DECORP, and CEPALCO are the first utilities to adopt the PBR regime.

“The proposed new rates of MERALCO will not be implemented until and unless it is established that long-term consumer interests are protected and promoted,” Albano said. – Donnabelle Gatdula