Meralco Initiates Refund on Generation Charges After Malampaya Price Adjustment

The Manila Electric Company (Meralco), a major power distributor, has announced its plan to refund customers for generation charges due to recent changes in Malampaya gas prices. This decision follows guidance from the Energy Regulatory Commission (ERC) and aims to adjust the financial impact on consumers.

Ronald Valles, Meralco’s Senior Vice President and Head of Regulatory Management, confirmed the refund strategy, highlighting the company’s responsiveness to the ERC’s directives regarding the January supply month’s Malampaya gas price increase. This move is part of Meralco’s commitment to aligning its charges with actual energy costs, ensuring fairness and transparency in its billing practices.

The ERC’s communication with Meralco emphasized the necessity of a thorough review to substantiate the rate adjustment. This review is crucial, especially considering the transition to liquefied natural gas (LNG) and the implementation of new gas supply agreements between the Malampaya Consortium and First Gas Power Corporation. The ERC has expressed the need for Meralco to validate the impact of these changes on its power purchase agreements (PPAs) before passing any cost adjustments to consumers.

In the meantime, Meralco has made an upward adjustment to its household electricity rates by 57.38 centavos per kilowatt-hour (kWh) for February. This recent rate hike means the typical household’s overall rate has increased to P11.9168 per kWh, marking the second increase in 2024. The primary factor behind this rise is the heightened generation charge, driven by the escalated costs of power from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).

Meralco’s proactive approach to refunding the generation charges underscores its dedication to regulatory compliance and customer satisfaction. As the validation process unfolds, Meralco and the ERC continue to work closely to ensure that any cost implications are justified and transparently communicated to the consumers.