Meralco to hike rates as ERC approves P4-B cost recovery

Millions of consumers of Manila Electric Co. (Meralco) will have to brace for higher power rates beginning September after regulators allowed the power distributor to recover more than P4 billion in payments to a subsidiary’s gas plant.

The Energy Regulatory Commission (ERC) has approved the Meralco petition to bill its customers P3.67 billion and $6.38 million in relation to its payments to Excellent Energy Resources Inc. (EERI).

The ERC argued that EERI—jointly owned by Meralco PowerGen, San Miguel Global Power and Aboitiz Power—must be compensated for delivering a portion of Meralco’s electricity needs.

Despite the pending issuance of a certificate of compliance, Meralco said that EERI had obtained certificates of provisional authority to operate for its three units.

In its decision, the ERC said it “recognizes” EERI’s commercial operations date. It then authorized the collection of the cost recovery for 12 months, translating into a rate hike of P0.1099 per kilowatt hour (kWh).

Delayed implementation

“However, considering the current situation of increasing prices of electricity, the Commission finds it prudent to adjust the start of the recovery period not earlier than September 2026 billing,” it added.

Filipinos have been suffering from ballooning fuel prices since war broke out in the Middle East on Feb. 28.

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Energy officials earlier said that power spot prices could go up to P9 per kWh, but ERC interventions, like the suspension of the Wholesale Electricity Spot Market and the modified administered pricing mechanism, have helped mitigate the potential increase.

Meanwhile, Energy Secretary Sharon Garin said on Wednesday that power interruptions were not expected because of runaway diesel prices.

She reiterated that only 3 percent of diesel consumption goes to electricity generation, noting that the country has enough supplies.