The Energy Regulatory Commission (ERC) is expected to issue its ruling next year, approving “change in circumstances” (CIC) applications that would result to higher rates, representing a total cost recovery from consumers amounting to P34.5 billion.
“So our target now is to ensure that the recovery of these amounts will not impact so much the electricity consumers,” said Francis Saturnino Juan, ERC chairperson.
Juan said the commission cannot say when the adjustments will be implemented or how much the cost recovery will be per kilowatt-hour, but they will try to mitigate the impact on consumers through a staggered and longer period of recovery.
He said they expect to come out wit the ruling and its implementation starting 2026.
The ERC has been deliberating on motions filed by distribution utilities and the generating company for a price adjustment due to the CIC in their power supply agreements (PSAs).
The ERC said the applications cited grounds similar to those used in the Manila Electric Co. (Meralco)-San Miguel Energy Corp. (SMEC) PSA, such as waning coal output from mine hubs; logistics issues in Russia, South Africa and Australia’s Hunter’s Valley region; government restrictions in Indonesia, which resulted in a coal export ban; and Russia’s invasion of Ukraine.
It said these were the same grounds declared by the Court of Appeals (CA) and upheld by the Supreme Court as events constituting a CIC in the Meralco-SMEC PSA case.
The ERC reiterated that the CA has ruled that abrupt and extraordinary changes in variations, such as the massive disruptions in the fuel value chain due to the COVID pandemic exacerbated by the Indonesian export ban and the Russia-Ukraine war, constitute a CIC.
The applications include the Meralco-South Premiere Power Corp. with a cost recovery amounting to P15.85 billion, covering the period May 26, 2022, to July 23, 2023 and the Meralco-SMEC/SPI contract with a cost recovery of P13.362 billion, covering the period May 26, 2022, to July 23, 2023.
It also includes Meralco and Phinma Energy Corp. (now ACEN Corp.) for two applications totaling P1.748 billion, covering the period January 2022 to December 2023, the La Union Electric Co. and Masinloc Power Partners Co. Ltd. (MPPCL) application for P1.779 billion and Nueva Ecija II Electric Cooperative, Inc. -Area 2 and MPPCL for P1.764 billion.
