Major industry players could finally breathe a sigh of relief this year as the Energy Regulatory Commission (ERC) has committed to resolving its long-standing rate-resetting backlogs — a move critical for the sector’s progress.

At a press conference on Monday, ERC chairperson and CEO Monalisa Dimalanta said that addressing the overdue rate resets for Manila Electric Co. (Meralco) and the National Grid Corporation of the Philippines (NGCP), among others, is one of the commission’s “non-negotiables” for the year.

Dimalanta also revealed that the ERC is focused on resolving the backlog within the first semester before two senior commissioners vacate their posts.

“The resets will be completed for both Meralco and NGCP. The resets cover the past periods. We cannot move forward unless we resolve these issues, especially since the reset system is built on the previous regulatory period,” she said.

Enhancing the entire energy system

The ERC chief emphasized that these efforts go beyond rate adjustments, aiming to enhance the entire energy system.

The Commission started implementing reforms to address the delays in rate-setting for Meralco’s Fifth Regulatory Period (5th RP) through Resolution No. 17, Series of 2024, which amends ERC Resolution No. 10, Series of 2021, to recalibrate rules and expedite the process.

It acknowledged that some years within Meralco’s original 5th RP have lapsed due to complex legal challenges and actions by various stakeholders.

In response, the ERC is recalibrating its rules to ensure timely rate resets while maintaining fairness and transparency.

A rate reset is a periodic process where the ERC reviews and adjusts distribution rates charged by utilities like Meralco to ensure that rates reflect the true costs of electricity delivery, accounting for factors such as inflation, operational expenses, and the Weighted Average Cost of Capital.