ERC clarifies concerns on MERALCO recoveries

The Energy Regulatory Commission (ERC) clarified concerns raised by some consumer groups particularly on the petition filed by Manila Electric Company (MERALCO) for authority to recover adjustment in generation and system loss charges docketed as ERC Case No. 2006-052 RC. MERALCO, in the said application, aims to update its generation and system loss charges.

The MERALCO application was filed pursuant to the provisions of R.A. 9136 otherwise known as the Electric Power Industry Reform Act (EPIRA) and consistent with the Supreme Court’s (SC) ruling in G.R. No. 163935 (NASECORE et. al. vs. MERALCO and ERC). “MERALCO merely complied with the Supreme Court’s ruling that required it to file an application for generation charge and system loss charge adjustments and to comply with the publication requirement in the EPIRA Implementing Rules and Regulations (IRR) even if such charges are only pass through charges as far as MERALCO is concerned,” ERC Chairman and CEO Rodolfo B. Albano, Jr. clarified.

Contrary to the impression of some consumers that there had been suspension of the recoveries under the Automatic Generation Rate Adjustment (AGRA), the suspension actually did not refer to the recovery but to the confirmation process under the AGRA. However, in the case of MERALCO, in the light of the Supreme Court’s ruling, it was directed to discontinue the implementation of automatic adjustments under AGRA. Hence, MERALCO resorted to file the application to enable it to recover adjustments in the generation and system loss charges.

The AGRA is a mechanism that allows the distribution utilities (DUs) full recovery of all allowable Generation Costs and other costs associated with the System Loss Caps to enable them to operate viably.

“The ERC appreciates and welcomes concerns and issues brought before it by the consuming public. Rest assured that the consumers have an ally in the ERC as it vows to promote and protect the long-term consumer interests in terms of quality, reliable and reasonably-priced electricity,“ Chairman Albano concluded.

December 12, 2006