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 follows the statement of former Energy Regulatory Commission (ERC) chairperson Agnes Devanadera in a hearing in the Lower House that Meralco used to answer the salary of ERC consultants who were assigned to determine the weighted average cost of capital ( WACC), which eventually reflects on consumers’ electricity bills. However, nowadays this is also not done.
According to Gatchalian, it is not appropriate for Meralco to pay the salaries of ERC consultants who are the regulator.
“While we expect the new distribution rate to be more favorable for our consumers, we expect a refund if applicable,” Gatchalian said. He stressed that the ERC should scrutinize the components of determining Meralco’s WACC, which has remained at 14.97% since 2015. WACC plays an important role in determining distribution rates.
“The ERC must ensure that all payments passed on by distribution utilities to consumers are fair and correct. Consumers should not be paying more than they should,” said Gatchalian.
Based on the ERC’s latest timeframe, the final decision for the fifth regulatory period rate reset for distribution utilities (DUs), including Meralco, is in March 2024. In fact, it is already delayed by more than a year from the original date made by ERC to complete Meralco’s rate reset.
Meralco earlier said that all parts of the electricity bill have gone through legal and regulatory approval and that they comply with any order based on the ERC’s rate review.
