Power rates in Luzon are expected to accelerate next year with the implementation of an increase in generation charges as a result of a spot market controversy back in 2013.

The charges to be passed on to consumers have been computed, according to Energy Regulatory Commission (ERC) chairperson Monalisa Dimalanta, although she refused to disclose the figure at this time.

'What we are studying is the timing. I do not want to reveal the number yet. But it has been completed. It was the Independent Electricity Market Operator of the Philippines that did the simulation… so likely we will have a two- or three-year spread,' Dimalanta said.

She said the amount is 'huge,' which is why payment has to be staggered.

'It cannot be implemented in one year. Even if we do it for two years it is still heavy. It has to be three years,' she said.

Dimalanta said the implementation of the collection, which will be done by some power distributors in Luzon for the generation companies, would likely commence next year.

In a 32-page decision promulgated in August 2021, the Supreme Court voided an ERC order issued on March 3, 2014, which regulated wholesale electricity spot market (WESM) prices for November and December 2013 supply months in Luzon.

The Court of Appeals in 2017 declared the same ERC order null and void and reinstated the WESM prices during the supply months in question.

The ERC in its March 2014 decision noted that there was 'market failure' in the WESM that pushed the rates by more than half of what was justified during the period.

The ERC voided the abnormal spikes in the WESM rates and imposed regulated prices, but the SC said the regulated WESM rates were imposed based on unfinished investigation.

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