The Energy Regulatory Commission (ERC) has issued a regulatory reset order, declaring that Manila Electric Co. (Meralco)’s fifth regulatory period will span 2025 to 2028, instead of the originally planned 2022 to 2026.
The ERC, in a decision promulgated Oct. 30, 2024 and signed by Commissioners Alexis Lumbatan, Catherine Maceda, Floresinda Baldo-Digal and Romeo Fuentes, classified the period July 1, 2022, to Dec. 31, 2024, as a “lapsed period.”
The commission ordered Meralco to refile its fifth regulatory period application in accordance with new rules to be adopted by the ERC.
The agency will initiate a rule-making process, subject to public consultation, to amend Resolution No. 10, Series of 2021, or the Rules for Setting the Distribution Wheeling Rates.
The ERC said it chose the “most reasonable and achievable procedure” to complete Meralco’s new regulatory reset.
Under the draft amended rules, the ERC will evaluate the regulated entity’s actual expenditures for the lapsed period, examining their “necessity and efficiency” to determine the annual revenue requirement. The review will consider data previously and newly submitted by the regulated entity, as well as relevant study results.
Meralco senior assistant vice president and head of regulatory affairs Jose Ronald Valles confirmed receipt of the ERC order but noted it was still subject to public consultation and final deliberation.
“So nothing is final yet. We will study the draft rules very carefully and submit our comments thereon as soon as the draft is released,” Valles said.
ERC chairperson Monalisa Dimalanta welcomed the “unanimous” decision, which modified an earlier split decision in August regarding Meralco’s rate reset.
“It has always been my position that EPIRA (Electric Power Industry Reform Act) requires the Commission to conduct a proper rate review, and this October 30 decision allows us to fulfill this mandate. The timelines are very aggressive, but with everyone’s cooperation, I believe this can be achieved,” Dimalanta said.
Meralco previously estimated a potential P16 billion refund once the ERC issues a decision on its fifth regulatory period.
The refund would account for the difference between the actual weighted average price and the maximum average price, or the highest allowable costs chargeable to consumers.
