MERALCO’s voluntary suspension approved but without imposition of interest charges - ERC
The Energy Regulatory Commission (ERC), on 01 February 2010, approved MERALCO’s (Manila Electric Company) motion for the voluntary deferment of its application of (1) Maximum Average Price (MAP) for the Regulatory Year (RY) 2010; and (2) translation of the MAP for RY 2010 into a distribution rate structure for its various customer classes that was approved in a Decision for ERC Case No. 2009-057 RC in December 2009.
MERALCO’s deferment is in response to the Motion for Reconsideration (MR) filed by intervenor Engr. Robert Mallillin on behalf of industrial customers who alleged that industrial customers are being prejudiced in favor of residential customers and asked for a revision of the rate structures of MERALCO.
Regulated entities under the performance-based rate (PBR) setting methodology are subject to a price cap which is adjusted on an annual basis. A delay in the implementation of rates may result to under-recoveries. Under the Rules for the Implementation of the PBR, under-recoveries are allowed to be recovered in the succeeding regulatory years and subject to an interest or cost of money rate. However, since the deferment is upon its request, the ERC ruled that MERALCO shall not be entitled to any interest on under-recoveries that it shall experience by reason of this deferment.
“The ERC invites all the parties of record to seize the opportunity on 05 February 2010 and pro-actively participate in the hearing of the MERALCO case before the ERC resolves the pending MR,” ERC Chairperson & CEO Zenaida G. Cruz-Ducut concluded.
February 5, 2010