Regulator hopes Meralco, SPPC can enforce supply deal to avoid rate hike

ABS-CBN News

Posted at Dec 08 2022 10:24 AM

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The Energy Regulatory Commission on Thursday said it remains hopeful that South Premiere Power Corp and Meralco could still enforce the remaining months of their power supply agreements to avoid electricity rate increases for consumers. 

On Wednesday, SPPC of San Miguel Power Corp suspended its power supply to Meralco, which forced the utility distributor to source about 12 to 13 percent of its supply portfolio from the wholesale electricity spot market (WESM) and other sources.

"It gives us hope that maybe the parties can still live through and enforce the remaining term of the power supply agreement if it’s just a suspension. Hope remains," Energy Regulatory Commission Chairperson and CEO Monalisa Dimalanta told ANC. 

SPPC charges P4.30 per kWh while the WESM imposes P7 to P9 per kWh, which could translate to higher bills for consumers, she added. 

"I heard the statement earlier from Meralco, if we substitute the WESM prices with the P4.30 and WESM will be about P9, that’s the impact. That would translate to about P.30 to P.40 per kWh increase. For a consumer that is consuming about 200 kWh a month in its power bill then that translates to P60 to P80 additional per month if this continues," she said. 

"It all depends on how Meralco re-calibrates its supply mix and ultimately what the price of the WESM would be during the remaining billing period for the month of November, December," she added.

The ERC earlier denied the petition of SPPC and Meralco for rate hike, enforcing the power supply agreement which was placed to protect consumers from unscheduled rate hikes.

Meralco on Wednesday said it was negotiating with other generation companies to secure the 670 MW of supply "to shield our customers against volatile and potentially higher WESM prices."

"Our priority is to ensure continuity of stable, reliable, and adequate supply for all our customers. We are exhausting all efforts to mitigate any impact of these develop," Meralco said.