ERC rules on Meralco's Motion for Reconsideration
The Energy Regulatory Commission (ERC) led by Chairman Manuel Sanchez issued its Order on MERALCO’s Motion for Reconsideration (MR) of ERC’s March 20, 2003 Decision on MERALCO’s rate case unbundling. The Order was arrived at after a careful evaluation and in-depth analysis of all the documents submitted by MERALCO in support of its MR. It showcased ERC’s commitment to strike a delicate balance in the promotion of the interest of all stakeholders in the electric power industry.
The Order would result to an average increase of 17 centavos per kWh compared to the average selling rate in May 2003. The increase, however, is still significantly lower than the P1.12 per kWh adjustment MERALCO filed with ERC last December 2001. Despite the increase, residential consumers with consumption of less than 300 kWh per month are expected to enjoy a reduction in their power bills. The marginalized sectors of the society, moreover, or households with minimal consumption of less than 50 kWh a month are projected to receive a hefty discount of almost a hundred pesos a month due to the lifeline rate policy designed by the ERC.
On the other hand, the impact on commercial and industrial users varies depending on the magnitude of their loads and their pattern of consumption.
The ERC also ordered MERALCO to discontinue the application of the Purchased Power Adjustment (PPA) upon effectivity of the Order. It likewise enjoined MERALCO to exhaust all efforts directed towards the provision of rate relief to its consumers including the renegotiation of its contracts with its Independent Power Producers. The ERC reminded MERALCO of its obligations to ensure that all costs incurred in carrying out its functions are reasonable and prudent.
In its Order, the ERC reiterated its intention to depart from the traditional return on rate base methodology of tariff setting towards performance-based regulatory regime. This new tariff setting methodology would set performance standards and promote efficiency that would ultimately redound to the benefit of the consumers.
Annex A - Summary Schedule of Unbundled Rates
Annex A1 - Summary Schedule of Unbundled Rates
Annex B and D - Sample Bill formats
June 02, 2003