Manila Electric Co. (Meralco) meticulously reviews generation charges to ensure only fair and lawful costs reach consumers, adhering to regulatory requirements and closely scrutinizing all costs passed on to the public.

The Pangilinan-led power distributor was reacting to a show cause order (SCO) from now resigned Energy Regulatory Commission (ERC) chairperson Monalisa Dimalanta over its power supply agreements (PSAs) with Panay Energy Development Corp. (PEDC).

“Meralco emphasizes that it not only validates but scrutinizes the fuel components of the generation charges before these are passed through to its consumers,” the power distributor said over the weekend.

The SCO stemmed from ERC’s January 2023 request for invoices and fuel cost computation for January to October 2022. 

Meralco said it provided the invoices despite these already being in its regular reports, but clarified that its then PSA with PEDC was a fixed-price financial contract without a separate fuel cost component.

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Due process questioned

The company said it only received the SCO nearly three years later and questioned references to a PSA that was terminated in 2021. 

It maintained that “there is no merit to the SCO,” describing it as “a blatant violation of due process” and “unreasonable” to hold it accountable for documents “never explicitly requested.”

In a separate resolution, the ERC also instructed Meralco and First Gas Power Corp. (FGPC) to follow proper procedures in seeking an extension of their power purchase agreement (PPA).

The ERC said it received the companies’ 22 May request for a term extension, followed by a 1 July urgent appeal for confirmation of the deal’s renewal.

“After due deliberation, the Commission resolved to issue a reply letter advising the parties to pursue the appropriate remedy/follow the proper procedure when requesting an extension of a power purchase agreement,” it said, adding that further guidance will come from commissioners.

The PPA covers electricity supply from FGPC’s natural gas-fired plants in Batangas. Any extension requires ERC review and approval to ensure competitive pricing and regulatory compliance.