ERC revisits 5RP rates reset
‘Before I was suspended, there was already a decision on the 5RP, but I think also because it was discussed in the Senate’
Awards light up power firmMeralco bagged multiple recognitions at the 2024 International Business Awards. Bearing the award trophies are (from left) Meralco First Vice President and Head of Customer Retail Services Charina Padua, One Meralco Foundation President and Chief Corporate Social Responsibility Officer Jeffrey Tarayao, Executive Vice President and Chief Operating Officer Ronnie Aperocho, First Vice President and Chief Sustainability Officer Raymond Ravelo and Senior Vice President and Chief Human Resources Officer Edgardo Carasig.
Photograph courtesy of Meralco
After initially deciding to forgo the rate resetting of the Manila Electric Co. (Meralco) for the fifth regulatory period (5RP), the Energy Regulatory Commission (ERC) is revisiting the application following recent Congressional feedback.
ERC chairperson Monalisa Dimalanta said on Monday that the regulator is now looking at making modifications to the application rather than completely foregoing it on account of suggestions received during a recent Congressional inquiry.
“Before I was suspended, there was already a decision on the 5RP, but I think also because it was discussed in the Senate, as correctly pointed out, the Commission has decided to revisit this matter and have made some modifications to the way forward,” Dimalanta told reporters.
“There are modifications in response to the sentiments already articulated in the Senate,” she added.
When asked about the specifics of the potential changes, Dimalanta explained that she is still reviewing the details and minutes from prior Commission meetings.
While she confirmed the validity of the modifications, she has yet to find specific information regarding any refunds.
No refund seen
“I haven’t seen anything about a refund yet, but I’m looking for that in the discussions,” she said.
If the ERC maintains its initial decision to forgo Meralco’s 5RP application, Meralco may request approval to refund the Average Weighted Actual Tariff (AWAT) that exceeds P1.3522 per kilowatt-hour for the entire 5RP period.
Should the ERC confirm the 5RP rate at P1.3522 per kilowatt-hour instead of the P1.57 per kilowatt-hour requested by Meralco, it is anticipated that the ERC will direct Meralco to refund the excess AWAT.
However, given the ERC’s decision to pursue a different route, the status of any customer refunds is now uncertain.
A rate reset is a periodic process conducted by the ERC to review and adjust the distribution rates charged by utilities like Meralco to ensure rates reflect the true costs of delivering electricity, considering factors such as inflation, operational expenses, and the Weighted Average Cost of Capital (WACC).
Meralco’s current WACC is 14.97 percent and has not been updated since 2015.