ERC to reach decision on Meralco, Napocor P20-B claims by March

The Energy Regulatory Commission (ERC) is expected to come up with a decision on the joint application of the Manila Electric Co. (Meralco) and the National Power Corp. (Napocor) to settle the latter’s P20 billion claims by March 2004.

"We are still evaluating the claims of both parties. We will still have to determine if their claims are reasonable," an ERC official, who requested anonymity, told The STAR.

The official said they are just 30 percent complete in their evaluation of the joint application. "It will take about three more months to finish the evaluation," the official added.

After the evaluation, the official said the Regulatory Services Division will then present the result to the commission. "It will be up to the commission to issue a provisional authority or schedule public hearings before coming up with a decision," he said.

Napocor assured earlier that its joint application for the P20-billion settlement with Meralco will result to a 25-centavo per kilowatthour (kWh) drop in power rates.

In an earlier interview, Napocor general counsel Rainier Butalid said the 25-centavo savings to the Meralco customers was based on the agreement entered into by the two power firms last March 2003.

"The primordial reason why we are having such an agreement is to decrease the electricity rates. This whole exercise is designed to benefit the consumers," Butalid said.

The 25-centavo reduction in power rates, once the agreement is approved by the regulator, is more than double the 12 centavo savings estimated by Meralco.

Based on March estimates, Meralco president Jesus Francisco said there is a 12-centavo per kWh reduction to consumers net of penalties.

Francisco, however, said the savings to Meralco consumers may vary based on price movements. "Prices move everyday. We do not know yet how much will be the reduction at present," he said.

Based on the agreement, Meralco will compensate Napocor P27.515 billion for the electricity it contracted but failed to purchase from the government-owned power corporation.

On the other hand, Napocor will pay Meralco P7.465 billion for its failure to provide transmission services to Meralco’s independent power producers. The net settlement amounts to P20.05 billion. The agreement will allow Meralco to pay this amount within five years.