ERC clarifies reported review of MERALCO's PBR application
The Energy Regulatory Commission today (March 12) clarified that MERALCO has no pending motion on any of the five building blocks that comprise the annual revenue requirements under Performance Based Regulation (PBR). The ERC also pointed out that MERALCO's pending application only concerns the translation of the ERC-approved price level under such PBR application into tariffs for MERALCO's various customer segments.
It will be recalled that the ERC earlier approved with finality MERALCO's annual revenue requirements and Maximum Average Prices (MAP) for the second regulatory period covering the period July 2007 to June 2011. PBR is an internationally-accepted rate-making methodology incorporating a system of incentives and penalties to improve the electric and customer service performance of electric utilities. ERC is implementing PBR pursuant to its authority under the Electric Power Industry Reform Act (EPIRA).
PBR was first implemented for the National Transmission Corporation (TRANSCO) under the Transmission Wheeling Rate Guidelines (TWRG), then for private distribution utilities (DUs) under the Rules for Setting Distribution Wheeling Rates for Privately-Owned Distribution Utilities (RDWR). Both rules underwent public consultation and scrutiny by the general public and industry stakeholders prior to promulgation and adhered strictly to internationally-accepted rate-making principles.
The
ERC sees no legal impediment to the implementation of the RDWR. "The review
of the inclusion of the Corporate Income Tax among the building blocks will
not happen at this time. The RDWR is valid and we are intent in implementing
it for MERALCO and for all other private DUs," according to an ERC official.
March 12, 2008