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Thursday, February 22, 2024

Senator tells ERC to speed up reset of Meralco power rates

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SENATOR Sherwin Gatchalian on Tuesday urged the Energy Regulatory Commission (ERC) to expedite the reset of Manila Electric Co.’s power distribution rate, which some lawmakers blamed for increases in power rates.

The senator’s call followed remarks by former Energy Regulatory Commission (ERC) chairperson Agnes Devanadera at a House hearing that Meralco  had previously paid for the expenses of ERC consultants  tasked with determining weighted average cost of capital (WACC) that has an impact on power rates.

It has since been discontinued. Gatchalian said it was inappropriate for Meralco to foot the bill for the regulator’s consultants.

“As we anticipate revised distribution rates that should be more favorable for our consumers, it is imperative that we not only hope but demand a refund if applicable,” said Gatchalian.

The senator’s observations also came in the wake of a privilege speech by Laguna
Rep. Dan Fernandez blaming Meralco’s unadjusted WAC,C as the key reason for the consistently high power rates, which are among the highest in Asia.

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Fernandez said the current WACC of Meralco was computed to allow the utility to cope with the Asian financial crisis then, but remained unchanged even after the crisis, allowing the utility to collect higher rates.

Meralco strongly denied however, allegations by  Fernandez that the distribution utility has been overcharging its customers since 2012.

Gatchalian said the ERC should look into the factors that go into computing Meralco’s WACC, which had been stuck at 14.97 percent since
2015. WACC is a key determinant in computing distribution rates.

“The ERC should make sure that rates being passed on by distribution utilities are fair and correct for consumers…Consumers should not be paying more than they should,” he said.

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