The Manila Electric Co. (Meralco) said power rates in Metro Manila could go up should regulators allow ACEN Corp. to apply so-called change in circumstance (CIC) claims on its power supply agreements (PSAs) with the distribution utility.
Meralco said ACEN has applied for a CIC adjustment as the price of coal pushed higher, necessitating the recovery of additional fees for power it supplied in 2022.
Jose Ronald Valles, Meralco first vice president and regulatory management head, told reporters that ACEN Corp. initially filed CIC claims of around P2.56 billion for 310 megawatts of baseload and mid-merit electricity it supplied during the year.
However, Valles said Meralco validation found the ACEN Corp. claims equal only P706.14 million recoverable over a staggered six-month period.
Valles acknowledged it is not clear at this point how large the reconciled claim will be and consequently the Meralco rate adjustment until the whole thing is settled.
“The reason why we’re joining the filing is we want 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, which we don’t want,” Valles added.
Meralco said that based on its calculations, and with ERC assent, ACEN’s CIC claims will result in an increase of more than 4 centavos in the generation charged over a period of six months.
Meralco did not quantify the increase in rates if it terminates the contract with ACEN and find another supplier.
Valles said should the ERC deny ACEN’s CIC claims, the enterprise will likely seek judicial intervention.
