The Energy Regulatory Commission or ERC, the power industry's watchdog, has been ordered to speed up the reset of the power distribution rate for the Manila Electric Company or Meralco, the country's largest distributor, to safeguard consumer interests.

Senator Sherwin Gatchalian, who currently sits as the Vice Chairman of the Senate Committee on Energy, said Tuesday that the ERC must ensure that all bills passed by distributing utilities to consumers are fair and correct.

"As we anticipate revised distribution rates that should be more favorable for our consumers, it is imperative that we not only hope but demand a refund if applicable," Gatchalian said.

The senator's call followed remarks by former ERC chairperson Agnes Devanadera during a congressional inquiry that it was previously the practice for Meralco to cover the expenses of ERC consultants tasked to determine the weighted average cost of capital or WACC.

Devanadera said it subsequently impacted consumer power rates but the practice has been discontinued.

Additionally, it also echoed the privilege speech by Laguna Rep. Dan Fernandez pointing to the unadjusted WACC as the key reason for consistently high power rates, which are among the highest in Asia.

Fernandez said the current WACC of Meralco was computed to allow the utility to cope with the Asian financial crisis but remained unchanged even after the crisis, allowing the utility to collect higher rates.

As such, Gatchalian said the ERC should closely scrutinize the components in determining Meralco's WACC, which has remained at 14.97 percent since 2015.

Responding to the lawmaker's call, ERC chairperson and CEO Monalisa Dimalanta said her office will not be remiss in its duties and even acknowledged that rate reset for the regulated entities was, in fact, delayed.

"I share the desire of the good Senator as well as other parties to expedite the delayed reset processes for our regulated entities.

That is one of the critical duties of the ERC under the EPIRA since the agency was established in 2001. The present Commission will make sure we will perform our duties," Dimalanta said in a text message to the DAILY TRIBUNE.

Based on the ERC's latest timeline, the final determination for the fifth regulatory period rate reset for DUs, including Meralco, is in March 2024, which Gatchalian tagged as already "delayed by more than a year."

Meralco, over the weekend, stated that all rates in the electricity bill have received prior lawful and regulatory approval and that they adhere to any orders for cost adjustments arising from regular reviews of its rates by the ERC.

The company even cited a recent study of the International Energy Consultants which concluded that Meralco's rates are fair and reasonable since they reflect the true cost of electricity as against other countries whose power costs are heavily subsidized by their governments.