SC orders ERC to review nod on Meralco 'unbundled rates'

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 The Supreme Court (SC) voided orders of the Energy Regulatory Commission (ERC) approving the Manila Electric Company’s (Meralco) unbundled rates that were used as the basis for a PHP0.168 per kilowatt-hour increase in power rates in 2014.

In an October 8 decision penned by Senior Associate Justice Antonio T. Carpio, the SC said the orders violated the ERC's statutory mandate to approve rates that will provide electricity to consumers “in the least cost manner.”

The SC remanded the case to the ERC to determine the valuation of Meralco’s regulatory asset base, as well as the parameters, whether expenses that are not directly and entirely related to the operation of a distribution utility should be passed on, wholly or partially, to the consumers, so that electricity shall be provided to consumers “in the least cost manner.”

“The Court (SC) said that Meralco and other electricity distribution utilities are monopolies that are regulated by the State, particularly on the rates they charge consumers. The same rationale in regulating power acquisition costs by distribution utilities applies to the allowable depreciation of capital assets by distribution utilities in the present case,” the SC Public Information Office said in a statement.

“(T)he Court further said that considering the case was remanded to the ERC, movant-intervenors Clark Electric Distribution Corporation, et al. can raise the issues raised before this present petition with the ERC instead,” it added.

The SC ruling granted partially the petition filed by the National Association of Electricity Consumers for Reforms, Inc. (NASECORE), which challenged the ERC’s June 21, 2011 order that upheld and declared final its May 30, 2003 decision granting Meralco's application for the approval of its unbundled rates, appraisal of its properties, and proposed increase in rates.

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