Power rates in Metro Manila may go up if regulators would allow ACEN Corp.’s application to apply change in circumstances (CIC) claims for power supply agreements (PSAs) with the Manila Electric Co. (Meralco).
Meralco bared this after ACEN filed the CIC application following an increase in the cost of coal fuel and will need to recover additional fees for power it supplied in 2022.
Jose Ronald Valles, Meralco first vice president and regulatory management head, told reporters in Pasig City on Monday ACEN initially filed for CIC claims of around P2.56 billion for 310 megawatts (MW) of baseload and mid-merit electricity supplied for the period.
However, Valles said upon Meralco’s validation, ACEN’s CIC claims should only be equivalent to P706.14 million that should be recovered and staggered in six months.
Valles said it is not clear if the CIC claim will be filed jointly with ACEN as the latter is yet to decide on Meralco’s cost evaluation.
“… we’re joining the filing… to preserve the PSAs. Under the contract, if we don’t agree to file and seek the approval of the Energy Regulatory Commission (ERC) for the claim, then they have a recourse to terminate the PSA, which is provided for under the contract,” Valles said.
“We don’t want them to exercise that right. We calculated that if they are terminated, it will be more costly as that means we will secure another contract from another supplier that is more expensive,” Valles added.
Meralco said based on its calculations, if allowed by the ERC, ACEN’s CIC claims would result to more than 4 centavos increase in the generation charge over a period of six months.
The company did not quantify the possible increase in rates if it will look for another supplier and contracts with ACEN were terminated.
Valles said that if the ERC would not grant ACEN’s CIC claims, the latter may go to court to appeal.
