Republic of the Philippines


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MERALCO PSAs Still Under Scrutiny - ERC

The Energy Regulatory Commission (ERC) has not approved the Manila Electric Company’s (MERALCO) Power Supply Agreement (PSA) petitions.  The agency assures the electricity consumers that the MERALCO PSA applications that are still pending its review are being evaluated to ensure that only just and reasonable costs shall be included in the electric bill.  The ERC, under Section 45 of the Electric Power Industry Reform Act (EPIRA) of 2001 is mandated to review bilateral power supply contracts entered into by distribution utilities.

“We are carefully scrutinizing each of the cost components in the MERALCO PSA applications that is why the final approval of these applications have been taking some time”, ERC Officer-In-Charge Alfredo J. Non disclosed.   “The Provisional Authority granted to Panay Energy Development Corporation (PEDC) in July 2016 was necessitated in view of the frequent yellow alert status of power reserves at that time.  We must remember that stable supply of power is among the anchors of our economy.”

The ERC’s Rules of Practice and Procedure provides that motions for provisional authority or interim relief may be acted upon with or without hearing.  The ERC shall act on the motion on the basis of the allegations of the application and supporting documents and other pieces of evidence that applicant has submitted and the comments or oppositions filed by any interested person, if there is any.

The ERC’s PSA approval entails a comprehensive process, which include:  (1) the conduct of the hearing process; (2) filing of formal offer of evidence; (3) technical evaluation; (4) Commission deliberation; and (5) issuance of a decision.

“The ERC’s grant of provisional or even a final approval to just one MERALCO PSA application should not be equated to all PSAs approval as applied by the applicants.  The rates and conditions that were provisionally approved are not necessarily the same rates and conditions in the final approval or decision of the case.  More often than not, the final rates have been lower.  We granted the provisional approval because it will be more beneficial to the consuming public, and the country as a whole, to have a continuing stable power supply than have rotating brownouts which is more damaging to the economy”, ERC OIC Non emphasized.   


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