Meralco, gencos get ERC nod to collect P31-B fuel cost recovery

By Sheldeen Joy Talavera, Reporter

OVER EIGHT MILLION customers of Manila Electric Co. (Meralco) may see higher electricity charges starting March after the Energy Regulatory Commission (ERC) approved P31 billion in fuel cost recovery sought by power generators.

In separate orders promulgated Jan. 26, the ERC approved the request of Meralco and four power generation companies (gencos) to collect an additional P0.2816 per kilowatt-hour (kWh).

The cost recovery period may span 12 to 36 months, or until the full amount is recovered.

The fuel cost recovery stems from terminated power deals between Meralco and Ayala-led ACEN Corp., as well as subsidiaries of Ang-led San Miguel Global Power Holdings Corp. (SMGP) — South Premiere Power Corp. and Sual Power, Inc.

Panay Energy Development Corp. (PEDC), the thermal subsidiary of Meralco PowerGen Corp., which in turn is the power generation arm of Meralco, will also collect recoveries.

Broken down, ACEN’s recovery from two power supply deals totals P1.75 billion, while the SMGP subsidiaries will collect a combined P29.21 billion. PEDC will collect P380.62 million.

The power generation companies cited “change in circumstance (CIC)” due to the surge in fuel costs brought on by Indonesia’s coal export ban and the Russia-Ukraine war.

Since September last year, Meralco has been collecting P5.1 billion from its customers under ERC directive as an initial payment to SMGP subsidiaries for fuel cost recoveries.

ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan expects the upcoming price adjustments of Meralco to be “minimal or none at all,” as the earlier collection is set to end in February.

“That is why we directed the implementation of the remaining CIC adjustments starting in March 2026 only so as to mitigate any impact on the overall rates of Meralco,” he told reporters on Tuesday.

Last month, Meralco rates declined by P0.1637 per kWh to P12.9508 per kWh from P13.1145 per kWh in December, driven by lower transmission charges.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.