The Energy Regulatory Commission (ERC) on Monday approved Manila Electric Co.’s (Meralco) P4.15 increase in its billing, the highest in Philippine history.

The rate hike will be implemented in three tranches, an arrangement under which electricity users could end up paying more in the end because for each tranche, they will either pay additional costs or interest.

Meralco attributes the record rate increase to the scheduled maintenance for the Malampaya natural gas platform, which forced the company to get the bulk of its supply from the Wholesale Electricity Market (WESM).

The adjusted rates will appear in the next billing statement of Meralco customers.

Meralco officials on Monday presented to the ERC several options under which the utility firm will collect the additional generation charge

The generation charge, the largest component in the electricity bill, is the cost of power Meralco purchases from its suppliers.

In their presentation, Meralco officials proposed a generation charge of P7.90 per kilowatt-hour in its December 2013 billing instead of the calculated P9.1070 per kwh, and collect the deferred amount of about P3 billion in its February billing.

Ivanna Dela Pena, Meralco first vice president and head of its regulatory management office, cited two other options - capping the generation charge for the December billing at P7.67 per kwh and implementing the deferred cost recovery in the February billing, or collecting P7.67 per kwh and spreading the deferred cost over the February and March 2014 billings.

The ERC approved the third option, which means that Meralco will implement a generation charge of P7.67 per kwh in its December billing and add to its calculated generation charge for February the generation rate of P1 per kwh.

With the approved way of cost deferment, consumers will pay P2.41 more per kwh in their December bill, P1.21 per kwh in their February 2014 bill and 53 centavos per kwh in March.

The ERC did not rule out another rate increase next year if Meralco seeks to collect carrying costs, the interest charged on the balance owed when paying in installments.

"The balance on the deferred generation amount without any carrying costs shall be included in Meralco’s generation charge for March 2014.

Should Meralco seeks to recover its carrying costs on the entire deferred amount, it shall file a formal application on this,” ERC officials said in a letter.

Presidential option

President Benigno Aquino 3rd said on Monday that he is studying the option of providing a subsidy to the public transport sector to cushion the effects of the power rate hike.

In an interview following the 80th anniversary of the Department of Labor and Employment, Aquino said he directed Executive Secretary Paquito Ochoa Jr., Energy Secretary Carlos Jericho Petilla, Finance Secretary Cesar Purisima, and Budget Secretary Florcencio Abad to study the possibility of tapping the Malampaya funds to finance the program.

The President expects a report from his Cabinet secretaries before he leaves for Japan this week.

The House of Representatives will conduct an inquiry to determine if the power rate increase is excessive.

Speaker Feliciano Belmonte Jr. said on Monday the House cannot stop the rate adjustment.

"The House cannot stop the contemplated increase, but the ERC definitely can because that is their job. In the case of the House, we want to find out the facts, see the basis of the increase, because this is a serious question,” Belmonte told reporters.

The ERC is headed by Zenaida Cruz-Ducut, one of the 71 people facing graft charges at the Office of the Ombudsman in connection with the Priority Development Assistant Fund (PDAF).

Lawmakers bewailed the timing of the power rate increase, coming on the heels of Super typhoon Yolanda and in the midst of preparation for Christmas and New Year celebrations.

"Frankly, I do think that the increase is high. Whether the [House] probe will apply pressure on anybody, we don’t really know. But we want to know the basis of the contemplated increase. Was this something that they have anticipated…that they would have spread it out? This question will be relevant,” Belmonte said.

Oriental Mindoro Rep. Reynaldo Umali, who heads the House energy committee, said the investigation may lead to ways on how the government and consumers can confront the power rate hike.

"The end goal for the probe is to mitigate the impact of the power rate hike on the electric consumers. There are many ways we could do it, including [state] subsidy and CSR [Corporate Social Responsibility],” Umali said.

Akbayan Rep. Walden Bello said the power rate hike is a gross violation of human rights because exorbitant increases result in inadequate access to electricity.

"This rate hike is simply callous and insensitive. Inadequate access to electricity leaves poor families with limited options for food preparation and cooking, as well as limits opportunities for better education,” Bello said.

He slammed Meralco for "having the gall” to implement the increase, considering that the price of Liquefied Petroleum Gas (LPG) was recently raised by P14.30 per kilogram. "The impending rate hike deprives women of the option to substitute electricity to LPG in terms of cooking and food preparation. The only option left to women is to burn traditional biomass, prolonged exposure to which could result in respiratory infections and diseases.,” Bello added.

With reports from Llanesca T. Panti and PNA