Senator Win Gatchalian urged the Energy Regulatory Commission (ERC) to expedite the reset of the power distribution rate for the Manila Electric Co. (Meralco).
The senator’s call followed remarks by former Energy Regulatory Commission (ERC) chairperson Agnes Devanadera during a congressional inquiry that it was previously the practice for Meralco to cover the expenses of ERC consultants tasked to determine the weighted average cost of capital (WACC), subsequently impacting consumer power rates. However, that practice has been discontinued.
According to Gatchalian, 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, emphasizing that the ERC should closely scrutinize the components in determining Meralco’s WACC, which has remained at 14.97% since 2015. WACC plays a crucial role in determining distribution rates.
“Dapat siguruhin ng ERC na patas at tama ang lahat ng bayarin na pinapasa ng mga distribution utilities sa mga konsyumer. Hindi dapat nagbabayad ang mga konsyumer ng higit pa sa nararapat,” he added.
Based on the ERC’s latest timeframe, the final determination for the fifth regulatory period rate reset for distribution utilities (DUs), including Meralco, is in March 2024. The senator has noted that the original date committed by ERC to complete Meralco’s rate reset is already delayed by more than a year.
Meralco has earlier stated that all rates in the electricity bill have received prior lawful and regulatory approval and that they adhere to any orders for cost adjustments arising from regular reviews of its rates by the ERC.