ELECTRICITY rates are expected to remain high by the end of 2024, according to the Energy Regulatory Commission (ERC).
This is after the ERC allowed Manila Electric Co. (Meralco) to collect some pass-through charges from consumers regarding the use of liquefied natural gas (LNG) starting from the October billing period of this year.
In its notice of resolution dated Aug. 13, 2024, the commission has now allowed First Gen Corp. subsidiaries First Gas Power Corp. and FGP Corp. to recover the difference between the previously approved pass-through costs, the landed cost of LNG, and the new gas sale purchase agreement (GSPA), between First Gen and the Malampaya consortium.
ERC Chairman and CEO Monalisa Dimalanta said the amount that will be charged per month from consumers is estimated at around P0.32 to P0.33 and will be reflected in the generation charge.
This means that for the next 12 months, customers will be automatically charged an additional P0.32 to P0.33 per kilowatt-hour (kWh) per month, but Dimalanta clarified that the monthly charges could still change depending on the blending of the LNG.
“Our initial estimate was about an additional 30 centavos per kWh because of the LNG use and rebased Malampaya gas price, and then an additional 2-3 centavos per kWh on the differential to be collected over 12 months,” she said.
This decision stemmed from another ruling by the ERC to initially allow Meralco to “only” pass on to consumers the landed cost of the LNG and not the other types of costs, including storage and processing of LNG.
In light of this ruling, First Gen said the decision was crucial to send the right signals to future investors, both local and international.
It will now also be able to collect previously uncollected and future charges with regard to the storage and processing of LNG.
Meralco also reminded customers of a possible increase in generation costs due to the aforementioned GSPA.
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