The Energy Regulatory Commission (ERC) said Monday it will issue an order on Manila Electric Co.’s (Meralco) rate resetting for the fifth regulatory period (5RP) within the year.
ERC chair Monalisa Dimalanta said that while a decision on Meralco’s 5RP application existed before her suspension, the commission revisited the matter following a recent Senate hearing.
“There was a modification in response to the sentiments during the hearings,” Dimalanta said.
She said the commission, under former chair Jesse Manalac, agreed to modify the resolution dispensing with the Meralco 5RP. Dimalanta is still reviewing the meeting minutes for specific details.
She said a majority of commissioners previously decided to forego the 5RP reset but was unsure if an order had been drafted.
“Target within this year. I hope within the month, within the week. Definitely within the year,” she said regarding the timeline for the order’s issuance.
Senator Sherwin Gatchalian earlier suggested that Meralco’s rate resetting could lead to a higher refund for consumers.
“I believe that the refund from Meralco would be significantly higher once the ERC completes resetting the distribution rate under the 5th regulatory period. It is expected to be bigger than the P16 billion that Meralco is saying,” Gatchalian said.
Meralco anticipates a P16-billion refund once the ERC issues a decision on its 5RP, covering 2022 to 2026. The refund represents the difference between the actual weighted average price and the maximum average price, or the highest allowable costs charged to consumers.
Gatchalian said Meralco’s weighted average cost of capital (WACC), a factor in setting distribution rates, remained unchanged since 2015, currently at 14.97 percent.
Gatchalian previously criticized the ERC’s decision to skip the review of Meralco’s distribution rate for the 5RP, arguing it could harm consumers. He expressed confidence that a completed review would result in a lower WACC for Meralco, ultimately benefiting consumers.
“I think that the WACC for Meralco would go down if the review is completed, thus, it is for consumers’ interest that the ERC resumes its review of the rates for the 5th regulatory period. It shouldn’t be maintained at 14.97 percent because it’s the consumers who suffer from high distribution charges,” he said.
