Metro Manila (CNN Philippines, July 19) – A consumer group has filed an appeal over the Supreme Court’s (SC) decision to uphold the 2013 order of the Energy Regulatory Commission (ERC) allowing the Manila Electric Company (Meralco) to implement a staggered power rate hike.
In its motion for reconsideration filed on Monday, the National Association of Electricity Consumers for Reforms (NASECORE) argued that Meralco’s request for a staggered power rate hike amounting to ₱22.64 billion violated the “least cost” principle of the Electric Power Industry Reform Act (EPIRA).
NASECORE emphasized that Meralco cannot charge consumers the power rates sourced from the Wholesale Electricity Spot Market (WESM) as it runs contrary to the Automatic Generation Rule Adjustments Rules of the ERC.
They explained the rates at WESM are highly volatile and determined every hour due to market forces.
The consumer group also cited Sections 24 and 25 of the EPIRA Law in regulating the rates imposed by power distribution utilities, which they claimed was not observed by the ERC in allowing Meralco’s power price hike.
“The WESM was never meant to be a supplier to private distribution utilities or electric cooperatives. It was established to enable generation companies to sell their excess electricity to retail electricity suppliers and industrial consumers, ideally during off-peak hours, but never ever to residential consumers,” NASECORE said in its motion.
The organization also questioned the SC for failing to acknowledge that WESM is covered by the EPIRA Law, which means the ways to determine power rates in the spot market must be approved by the ERC.
NASECORE, which is one of the petitioners in the SC decision upholding the 2013 ERC order, highlighted in its motion that Meralco’s request for price adjustment should have been the subject of a “full-blown” hearing by the agency.
The group alleged that Meralco sidestepped the normal procedure when the company only sent a letter to the ERC to justify their power rate hike due to the shutdown of Shell Philippines Exploration B.V. Malampaya operations and scheduled maintenance of other power generation plants.
NASECORE added the ERC did not address the high WESM prices, but instead only dealt with the payment and carrying costs of Meralco.
“The first and only resort of Meralco, unfortunately, was to draw on the volatile WESM to cover the shortfall, in the stupendous amount of ₱22.64 billion, guaranteed to create not just a ripple but a shockwave in the spot market. Prices went soaring,” the group stated in its motion.
