THE Energy Regulatory Commission (ERC) asked distribution utilities (DUs) in Luzon and the Visayas not to charge their customers based on Wholesale Electricity Spot Market (WESM) preliminary statements in issuing bills for June.

Through an order dated June 10, 2024, the ERC directed all DU in the Luzon and Visayas grids to delay charging their consumers the generation charge based on WESM's preliminary statement (PS) and wait until the final statement (FS) is released by the Independent Electricity Market Operator of the Philippines (IEMOP) to all market participants.The ERC said the measure aims to ensure that the billings of DUs to their consumers will reflect the accurate values corresponding to WESM purchases.To recall, in May 2024, the ERC suspended market operations for the Luzon and Visayas grids on various dates amid a series of red and yellow alerts.And during the intervals when the market was suspended, the administered price and, in certain instances, the secondary price cap were applied instead.The administered price is imposed by IEMOP to participants during market suspension and intervention to be used for settlement of payments.Meanwhile, the secondary price cap is a preemptive mitigation measure imposed by the ERC to address sustained high market prices.The ERC also said it simulated the impact of the applications of both the administered price and secondary price cap, and noted that WESM's PS is still subject to final adjustment.Based on its projection, the ERC said that the FS has significantly lower WESM charges compared to those indicated in the PS.For its part, the Manila Electric Co. (Meralco) said it will comply with the ERC order, adding it anticipated the development and asked the commission to defer the collection of a portion of the WESM charges.The final billing, according to the regulator, is expected to be lower than the preliminary billing as this would reflect the implementation of administered pricing and secondary price cap in the WESM during the last supply month."Meralco will comply with this directive and will wait for IEMOP's adjusted billing before computing the final rates for June and issuing the bills to our customers," said Joe Zaldarriaga, Meralco spokesman and vice president for corporate communications."With this, we also advise our customers to expect a slight delay in the delivery of their bills. We would like to give the assurance that these efforts are meant to mitigate the impact of the expected rate increase to all our customers," he added.Meralco also said that given the tight supply condition in the Luzon grid, it anticipates an increase in WESM charges that will affect the generation charge, while the deferred costs are proposed to be collected on a staggered basis for a period of three months or from June to August.This is in addition to the other factors that could affect the June electricity rate billing, including settlement costs in the reserves market, and the weakening of the peso versus the US dollar."To cushion the impact of the rate increase to our customers, Meralco initiated the coordination with its suppliers to defer portion of their generation costs," Zaldarriaga said.Meralco said the ERC has objections to the company's proposed mitigation measure.