Customers of the Manila Electric Co. (Meralco) may have to pay an additional 33 centavos for 12 months starting in October after the Energy Regulatory Commission (ERC) allowed the Pangilinan-led power distributor to modify rates to reflect existing supply contracts.
Based on ERC’s Notice of Resolution dated 13 August but was only published yesterday, the commission allowed First Gas Power Corp. and FGP Corp. to recover the difference between the previously approved pass-through costs and the landed cost of liquefied natural gas (LNG) and the new Gas Sale Purchase Agreement (GSPA).
First Gas Power and FGP are both affiliates of the Lopez Family’s First Gen Corp.
ERC chairperson Monalisa Dimalanta clarified that the monthly impact of the decision on power rates could range from 32 to 33 centavos per kilowatt-hour for 12 months.
“For example, a consumer with 200 kWh consumption, that’s a P66 rate increase for a month,” the ERC chief said in a text message.
Dimalanta emphasized that the monthly fuel charge is not fixed. It varies based on the fuel mix used by the companies, which currently may include indigenous gas, liquid fuel, and imported LNG.
Generally, the ERC’s decision helps address the local fuel supply challenges and supports the ongoing transition to alternative energy sources while ensuring that the burden on consumers is managed.
First Gen recently emphasized the significance of the ERC’s decision, highlighting that it sends a positive message to investors.
Generally, the ERC’s decision helps address the local fuel supply challenges and supports the ongoing transition to alternative energy sources while ensuring that the burden on consumers is managed.
Previously, First Gen could only collect pass-on costs related to the landed cost of LNG, excluding other factors such as storage and processing.
It can be recalled that Meralco had already expressed unease concerning a potential rate increase if the ERC approved a new GSPA as it would trigger a change in the power plant’s new pricing formula.