No approved distribution rate increase for MERALCO - ERC
The Energy Regulatory Commission (ERC) has not yet approved any distribution rate increase by Manila Electric Company (MERALCO) effective its February billing, contrary to news reports appearing in today’s major dailies. In fact, there is yet no such application filed by MERALCO with the ERC. “Once the ERC receives MERALCO’s application, it (the application) still has to undergo the usual due process (i.e., public hearings), technical evaluation, and deliberation. Only after completion of the said process can the rate adjustment be implemented based on the final decision of the ERC,” ERC Chairman and CEO Rodolfo B. Albano Jr. said.
The ERC earlier issued a Decision on MERALCO’s application for its annual revenue requirements and performance incentive schemes using the performance based rate-setting (PBR). It required MERALCO to file its application to convert its approved MAP (maximum average price) into distribution tariffs on or before January 10, 2008. The PBR replaced the traditional RORB (Return on Rate Base) methodology which is purely based on the DU’s (distribution utility) “cost-of-service”. The PBR encourages efficiency and quality service to: (1) provide substantial economic and reliability benefits to electricity consumers; (2) ensure the continued, sustainable operation of DUs; and (3) promote stability in the market.
“The general public is urged to join the public hearings to be set for the MERALCO distribution rate application. Rest assured that the ERC-approved rates will only include just and reasonable costs and a reasonable margin to enable the DUs to operate viably. The ERC will always promote and protect the long-term consumer interest in terms of a sustainable supply of reasonably-priced quality electricity,” Chairman Albano added.
January 8 , 2008