THE Energy Regulatory Commission (ERC) has granted provisional approval to the application of More Electric and Power Corp. to adjust electricity rates in Iloilo City but at an amount lower than what the Razon-led company applied for.
In an order promulgated on June 8, 2022, the regulator approved a rate of P0.4725 per kilowatt-hour (kWh), or lower by P0.0773 than the P0.5498 per kWh sought by the distribution utility.
“After due deliberation and thorough evaluation of the documents submitted and the information gathered by the Commission pursuant to its regulatory powers, the Commission resolves to GRANT the Applicants’ prayer for provisional authority,” the ERC said.
More’s application stemmed from its emergency capital expenditure (capex) budget for projects that turned out to be even higher than what the city’s previous power provider secured.
In its application, More said that its approved emergency capex projects for 2020 amounted to about P1.33 billion, or higher than the P1.18-billion average regulatory asset base of Panay Electric Co. (Peco), which used to serve Iloilo City. More took over on Feb. 29, 2020.
In its application, More said that if it “would not be allowed to immediately recover such a significant amount, it would severely impair its cash flow.”
Further, it said that without the rate adjustment, More’s finances “would be adversely affected and this may adversely affect its ability to provide adequate and reliable power distribution services to its customers.”
More said Peco’s last approved rate could not cover the significant costs already incurred by the company in implementing the approved emergency capex projects for 2020. The emergency capex was sought to immediately rehabilitate, modernize and improve the distribution system in Iloilo City.
More said its prevailing effective rate is insufficient to allow the “full recovery of prudent and reasonable economic costs incurred” by it for the capex projects that had been approved by the commission.
“Hence, the need to adjust the rates to account for said reasonable costs,” it said. — VVS