48 Luzon power distributors file for rate adjustments

by Jun 20, 2023Featured Article, News

MANILA, Philippines — Consumers in Luzon should brace for higher electricity rates as power distributors on the main island, including Manila Electric Co. (Meralco), start seeking adjustments in their rates.

In a statement on Tuesday, the Energy Regulatory Commission (ERC) said 48 distribution utilities (DUs) have filed for automatic cost adjustment and true-up (the difference between the estimated price when a power supply contract was signed and the actual price when the electricity was used) recoveries for the period 2020-2022, while 20 others are yet to lodge their applications.

Meralco is seeking the ERC’s approval to collect P7.9 billion in under-recoveries which, if approved, would entail collecting about 22 centavos per kilowatt-hour over a 12-month period.

Of the amount, generation charges accounted for P6.4 billion, with the balance related to transmission and systems loss as well as real property taxes.

“The applications will be evaluated by the ERC to validate the recovery of pass-through costs implemented by the DUs and confirm the true-up of other pass-through charges, if any,” the ERC said in a statement on Tuesday.

According to the regulator, this mechanism governs the automatic charging of “pass through” costs to customers of power distributors as part of government efforts to ensure that electricity rates are “fair and reasonable.”

The regulatory agency reminded 20 DUs of their failure to submit the mandated application on time. The agency already extended the deadline for Luzon-based DUs to file for 60 days or until May 30 this year.