The Energy Regulatory Commission (ERC) has allowed the Manila Electric Co. (Meralco) to implement the adjusted rates from natural gas-fired power plants where it has existing supply contracts starting from the October billing period of this year.
Under ERC’s Notice of Resolution dated Aug. 13, 2024, the commission allowed First Gas Power Corp. and FGP Corp. to recover the difference between the previously approved pass-through costs and the landed cost of liquefied natural gas (LNG) and the new Gas Sale Purchase Agreement (GSPA).
Both companies are affiliates of First Gen Corp.
Monalisa Dimalanta, ERC chair, said in a separate statement the monthly power rate impact arising from the decision may be between P0.32 and P0.33 per kilowatt hour for 12 months.
Dimalanta said the amount is not fixed per month and will depend on the mix of fuel the companies will use, currently from indigenous gas, liquid fuel and imported LNG.
Prior to this, First Gen was only limited to collect pass on costs from the landed cost of LNG but not for other factors such as storage and processing.
Today’s ERC decision allowed First Gen to collect previously uncollected and future charges involving storage and processing of LNG supply that it will use.
Meralco earlier warned of a possible upward rate impact when the new GSPA secures approval from the ERC as the natural-gas fired power plants will be using a new pricing formula.
