21 Sep ERC to decide on SMC rate increase petition by Oct. 4
THE Energy Regulatory Commission (ERC) assured that it would issue a fair decision on or before Oct. 4 on the temporary relief sought by San Miguel Corp. (SMC) and Manila Electric Co. (Meralco).
“We are mindful of the timeline in SMC’s letter to Meralco,” Floresinda Baldo G. Digal, a commissioner at the ERC, told BusinessWorld via Viber on Wednesday.
SMC, through its energy arm SMC Global Power Holdings Corp., and Meralco jointly filed a petition with the ERC for a temporary rate increase.
ERC said it started the deliberations on the petition, which covers the companies’ two power supply agreements (PSAs).
Ms. Digal said that the ERC would come up with its decision on or before Oct. 4, or the date SMC warned it would terminate its PSAs.
In SMC’s letter to Meralco, it said that South Premiere Power Corp. and San Miguel Energy Corp., the administrators of the coal power plant in Sual, Pangasinan, and natural gas-fired power plant in Ilijan, Batangas had issued notices of termination of their PSAs, effective on Oct. 4, if the regulatory body denied its appeal for relief.
Last month, SMC said its Ilijan and Sual plants suffered combined losses of P15 billion, prompting the company to seek a rate increase to continue supplying power to Meralco.
If the ERC approved the petition for temporary relief, electricity prices in Luzon would go up by 30 centavos per kilowatt-hour (kWh) over a period of six months.
However, in SMC’s previous statement it said that if ERC failed to act on its petition, electricity prices in Luzon and adjacent provinces will go up as much as 30% starting October.
Meanwhile, Meralco previously said that it had already secured emergency power supply deals with several generators in case the termination of the PSAs will push through.
In a virtual briefing on Sept. 8, Lawrence S. Fernandez, Meralco’s vice-president and head of utility economics, said that preserving the existing PSAs with SMC is the least cost option for consumers.
Mr. Fernandez said that Meralco had contracted “four to five” generators for the emergency purchase of power, including from one power plant of Aboitiz Power Corp.
“The weighted average offers from the different suppliers were between P7 and P8 per kilowatt-hour for one year supply starting October,” he said. — Ashley Erika O. Jose