Meralco customers to get refund in March due to gas price hike
MANILA, Philippines — Customers of the Manila Electric Co. (Meralco) will get a refund in March corresponding to the increase in Malampaya gas price of First Gas Power Corp.
Meralco senior vice president and head of regulatory management Ronald Valles said they are implementing a refund upon “guidance” from the Energy Regulatory Commission (ERC).
In its order to Meralco to issue a refund, the ERC said the power distributor should have reviewed the higher natural gas prices from the Malampaya consortium before passing on the increase to consumers.
The power distributor increased its February rates by P0.5738 per kilowatt-hour, mainly due to increase in fuel cost such as liquefied natural gas (LNG).
Meralco said it earlier reached out to ERC to seek guidance on how to address the increase in natural gas price from its main supplier, First Gen.
“While Meralco admits that a validation of the impact of the use of LNG and the new gas supply contracts is necessary in light of the terms of its power purchase agreements, up to this date, the ERC has not been provided with the results of Meralco’s validation,” ERC Chairperson Monalisa Dimalanta said.
“Pending Meralco’s validation of the basis of such charges, passing on of such costs to the consumers may be premature,” she added.
In a letter addressed to the ERC, the power distributor admitted not having received a copy of the new gas supply and purchase agreement between Malampaya Consortium and First Gen.
“What drove the increase in the generation charge which churned up by P0.4552 per kilowatt-hour is possible primarily due to higher cost of power from Independent Power Producers and Power Supply Agreements,” Meralco vice president and head of corporate communications Joe Zaldarriaga said at a press conference last week.
In a statement, Valles said that the higher gas prices are pass-through costs and they would also not be in a position to pay the equivalent cost to First Gas.
For the LNG component of the fuel cost of First Gas plants, Meralco said they would file “the appropriate pleading” with ERC for confirmation of the pass-through costs.
“We emphasize that the use of LNG for commissioning is important to ensure that First Gas plants will continue to operate and supply power to Meralco at the least cost, in light of anticipated expiration of the Gas Supply Agreements between First Gas and the Malampaya consortium,” Valles said.
