February 10, 2014

MER to seek approval for a staggered implementation of another rate hike

Even before the resolution of its petition for the December power rate hike, the Manila Electric Co is reportedly planning to seek another P5.33/kWh rate hike to pass on the higher December generation costs which were supposed have been implemented in January.

However, the new rate hike will be spread out over a longer period to lessen the impact on consumers’ bill. MER said it will file the new rate hike petition upon clarification with the Supreme Court that the temporary restraining order it issued earlier only covered the rate hike in December (reflecting the higher November generation costs).

Our Take: Amid strong public protests and pending the Supreme Court probe on the causes of the earlier generation cost surge, it might be politically unfeasible to implement the new rate hike. Government is also currently investigating the alleged collusion among power generators that supposedly led to the price spike at the power exchange market.– WealthSec