ERC allows recovery of ₱31B from power firms’ terminated supply deals

Customers of Manila Electric Company (Meralco) should brace for higher electricity bills starting March after the Energy Regulatory Commission (ERC) allowed four power generation companies to recover a combined P31.34 billion arising from the termination of their power supply agreements (PSAs) due to a “change in circumstances.”

In separate orders, the ERC authorized San Miguel’s South Premier Power Corp. (SPPC), San Miguel Energy Corp. (SMEC), ACEN Corp., and Panay Energy Development Corp. (PEDC) to recover the approved amounts from Meralco customers.

“Despite the P0.28 per kilowatt-hour (kWh) rate impact, which we achieved by stretching the recovery periods for all these adjustments, we are still anticipating that the overall net effect on Meralco’s rates of the change in circumstances (CIC) adjustments will be minimal or none at all,” ERC Chairperson Francis Saturnino Juan said.

Juan noted that Meralco has been implementing a CIC rate averaging P0.28 per kWh per month since September 2025, a scheme that will continue until February 2026.

“That is why we directed the implementation of the remaining CIC adjustments to start only in March 2026, in order to mitigate any impact on Meralco’s overall rates,” he added.

Under the ERC ruling, SPPC was allowed to recover P15.85 billion, while SMEC may recover P13.36 billion. These will be charged to Meralco customers at P0.1246 per kWh and P0.1051 per kWh, respectively, over a 36-month period beginning the March 2026 billing cycle.

The order follows a Supreme Court ruling affirming a Court of Appeals decision that granted SPPC, SMEC, and Meralco’s appeal to increase generation charges in 2022, citing soaring fuel costs triggered by the Russia-Ukraine war and Indonesia’s coal export ban.

The ERC likewise allowed Ayala-led ACEN to recover P1.75 billion, to be collected at P0.0427 per kWh over 12 months, after it was permitted to terminate its PSA with Meralco.

Meanwhile, PEDC was authorized to recover P380.62 million, equivalent to P0.0093 per kWh, also to be charged to Meralco customers over 12 months.—MCG, GMA Integrated News