Meralco asks ERC to recalculate market prices

MANILA, Philippines - The Manila Electric Co. (Meralco) is seeking a review or recalculation by the Energy Regulatory Commission (ERC) of market prices for November and December to help it determine the real cost of electricity.

Meralco’s request was contained in an Omnibus Motion with Manifestation filed with the ERC on Feb. 3.

Meralco is seeking the recalculation after hearings at the Senate and House of Representatives showed that certain power plants may have violated market rules when they offered to sell power to the market but failed to dispatch or deliver.

The power utility firm said that had all the available capacity reported by the National Grid Corp. of the Philippines (NGCP) – including the 610-megawatt Malaya power plant – been offered or dispatched, prices in the Wholesale Electricity Spot Market (WESM) would not have skyrocketed.

WESM is the country’s trading floor for electricity. The clearing prices in the spot market rose to as high as P62 per kilowatt-hour from November to December 2013.

“Had all the available capacity reported by NGCP including the 610-MW Malaya power plant been offered and dispatched, Therma Mobile could not and should not have cleared at P62 per kilowatt-hour in any of the four and 21 hourly trading intervals in the November and December 2013 supply months, respectively,” Meralco said in its motion.

A recalculation may show a lower price than the amounts billed by WESM operator Philippine Electricity Market Corp. (PEMC) and the generation companies on Meralco, the power firm said.

“In light thereof and in the interest of the consuming public, Meralco respectfully moves for the re-run of WESM transactions and dispatches or for the undertaking of any other appropriate measure to recalculate and determine the true cost of electricity in the WESM during the November to December 2013 supply months (Meralco’s December 2013 to January 2014 billing months),” Meralco said in its motion.

“This re-run or recalculation would be consistent with and in accordance with the powers granted to this Honorable Commission in the Electric Power Industry Reform Act of 2001 (EPIRA), specially Section 43,” Meralco said.

The power distributor also said that in deference to the 60-day temporary restraining order issued by the Supreme Court on its rate hike bid, and pending the outcome of the requested market re-calculation, it “cannot and should not be made to pay the full WESM bills of the PEMC.”

Meralco’s generation charge rose to a record high of P9.10 per kwh in December 2013 following the month-long shutdown of the Malampaya power facility and the high prices at the WESM.