MANILA (UPDATE) -- A senator has asked the Energy Regulatory Commission (ERC) to explain to the consumers Meralco's looming rate hike in October.

For October, the ERC has allowed the recovery of around P0.30/kWh in the generation charge due to higher natural gas prices. In an interview with Teleradyo's Gising Pilipinas, Senator Sherwin Gatchalian said the Senate will scrutinize if the pass-through increase of around P0.30 per kilowatt-hour is justified. If not, Gatchalian said consumers could demand a refund, although the increase may still push through before any finding is determined.

For September, there is still an increase of P0.77/kWh, the last tranche of the staggered increase in generation charge last June 2024. ERC Chairperson Monalisa Dimalanta said power plants resorted to more expensive imported liquefied natural gas (LNG) when the output of the Malampaya facility dwindled in the last months. But Dimalanta said that the cost of natural gas from the Malampaya facility also went up. 

According to Dimalanta, the commission has questioned why prices of Indigenous natural gas also increased, when the previous commission already approved the "legacy contract". Dimalanta, however, said this situation will not happen again due to stringent rules on the competitive selection process. 

She said prices of imported LNG have been going down in recent weeks so there is a chance that the impending increase in October is going to be lower than P0.30/kWh.

"Kung sakaling magtuloy pagbaba ng presyo ng LNG, baka pwedeng mabawasan ang pagtaas," she said. 

MERALCO: NO INDICATION OF RATE HIKE YET 

Meralco meanwhile said it is too early to declare that the overall rate will definitely increase in September. What is certain, according to Meralco Spokesman Joe Zaldarriaga, is that there is still a P0.77/kWh increase in generation charge.

But Zaldarriaga said there are other factors that can affect the September bill, like spot market prices, as well as contracted supply from other power plants.

According to Zaldarriaga, for October, Meralco is just passing on to consumers the increase approved by the ERC. 

Power rates were slightly up in August.

Zaldarriaga said Meralco is not a party to the supply agreement between 2 Lopez-owned plants and the Malampaya consortium for the supply of natural gas.

Meralco said the appreciation of the peso against the dollar will also reduce the generation charge since many of Meralco's suppliers bill in US dollars.

"A portion of the generation cost of power suppliers, usually for the fuel component, may be priced in US dollars. For example, the price of Malampaya natural gas, although sourced from the Philippines, is billed by the Malampaya Consortium to First Gen plants in US dollars," Meralco said in a text message.

"First Gen, in turn, includes the said fuel cost in their bill to Meralco in US dollars as well. With a stronger peso, the peso-equivalent of the charges in US dollars will decrease. This, in turn, will reduce the generation cost," the company added.

Meanwhile, Meralco said it has secured the lowest bids for its 600-megawatt (MW) baseload supply requirement. The Competitive Selection Process (CSP) showed that Masinloc Power Co. Ltd. had the best bid after it offered P5.6015 per kilowatt-hour (kWh) total levelized cost of electricity rate (LCOE), inclusive of line rental cost and value-added tax, for 500-MW capacity.

GNPower Dinginin Ltd. Co., meanwhile, offered to supply the remaining 100-MW baseload requirement at an LCOE rate of P5.7392 per kWh, Meralco said. 

"Both offers are significantly lower than the P7.2609 per kWh reserve price set for the bidding," the company said. 

The next possible best bids were Mariveles Power Generation Corporation, which offered P6.4017 per kWh for 200-MW of supply and Quezon Power Philippines Limited Co. which submitted a P6.5487 per kWh bid for 400-MW of the baseload requirement.

The CSP was conducted "in full compliance" with the rules and regulations issued by the ERC and the DOE.

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