The Energy Regulatory Commission (ERC) has lifted the deferment on the P0.269 rate hike implementation of Manila Electric Company (Meralco) which the utility firm voluntarily stopped collecting since February billing due to procedural questions interposed by one of the case’s oppositors.

Contrary to reports, the adjusted P1.4917 per kilowatt-hour (kWh) distribution charge of Meralco was not a newly-approved adjustment, since this was already implemented in the January billing of the utility firm. The approval of the increase from P1.2227 was actually granted by the ERC in its ruling issued December 14 last year.

Nevertheless, since the company’s distribution charge will be coming from the deferred adjustment last month, the naturally-occurring impact in the rates when applied to March-April billing cycle will be an increase.

In the ruling rendered by ERC on the lifting of the rate deferment, it noted the proposal of intervenor Engr. Robert F. Mallilin for  Meralco to design a new rate structure that shall account for subsidy removal and to correct existing distortions in the rates, but any adjustment in the utility firm’s tariff must be considered in the next regulatory reset period, which is next year.

“The Commission deems it appropriate to approve a new rate schedule that will remove all rate distortions and better ensure that no cross subsidies remain, except for lifeline rates,” the ERC verdict has emphasized.

The regulatory body qualified though that “as previously declared by the Commission, modifications to the current rate structure may only be done at the start of the next Regulatory Period.” The ERC thus directed that “this will be considered in the subsequent reset application of Meralco.”

Meralco first vice president Rafael L. Andrada already apprised reporters that the deferment in their performance-based (PBR) adjusted rates will translate to deferred revenue recovery of up to P500 million monthly or about P1 billion over two months.

The ERC has similarly clarified that any amount which has not been collected by the utility firm during the period of deferment of its rate hike’s implementation may only be recouped at its next reset period in 2011