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SC order stops billing surge

Meralco protects consumers vs price surge.

Chito Lozada



The recent Supreme Court (SC) resolution affirming regulatory authority to halt a previous surge in the Wholesale Electricity Spot Market (WESM) prices would mean that the additional costs will not be tagged to the generation charge which are passed on to consumers, dominant power distributor Manila Electric Co. (Meralco) said yesterday.

The tribunal’s ruling also affirmed the ERC’s jurisdiction to correct market prices when warranted, Meralco First Vice President and Head of Regulatory Management Jose Ronald Valles said.

Last month, the SC affirmed ERC’s authority to implement price controls at the WESM, the country’s trading floor for electricity, as part of its police power to avoid “unusually high and unreasonable market prices.”

Based on the SC resolution, WESM prices surged twice during successive billing months of WESM as spot prices reached as high as P4,903 per megawatthour (MWH) and P7,218 MWh, respectively.

P6 per kwh more prevented
Meralco then requested a PEMC investigation which resulted to the PEMC Market Surveillance Committee concluding that certain market participants behaved anti-competitively and abused market power.

Eventually, the ERC set the WESM settlement prices at Time-of-Use rates used by state firm National Power Corp. which the Court of Appeals and, subsequently, the SC affirmed.

The amount involved was almost P9 billion that would have resulted to an additional P6 per kilowatthour (kWh) in generation charges.

Valles stressed the “resolution is a welcome relief to consumers, especially at this time of pandemic, as there would be no additional burden to consumers. If the WESM prices were not adjusted, this would have translated to an increase in the generation charge (in electricity bills) of about 90 centavos and P2.05 per kilowatt hour for the supply months of September and October 2006, respectively.”

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