BILL BUFFER: MORE Power seeks ERC approval for staggered payments

By Rjay Zuriaga Castor

MORE Electric and Power Corp. (MORE Power), the distribution utility serving Iloilo City, has asked the Energy Regulatory Commission (ERC) for approval of a staggered payment scheme for its Wholesale Electricity Spot Market (WESM) purchases to ease the impact of rising generation costs on consumers.

Justin Lunar, supervisor of MORE Power’s Energy Sourcing Department, said the request was filed amid projections that generation charges could increase by about PHP 2.00 per kilowatt-hour (kWh).

Generation charges, which cover the cost of producing electricity, are pass-through costs that distribution utilities collect on behalf of power generators without earning any profit.

Lunar said the increase in generation costs is being driven by the ongoing Middle East conflict and a series of red and yellow alerts in the power grid, which triggered manual load dropping and pushed fuel costs to peak market levels.

“We expect that what we will be billing in the next months is pricier compared [to previous months]. We sent a request to the ERC, requesting a staggered payment to our Independent Electricity Market Operator of the Philippines (IEMOP) billing,” he said on June 5.

Lunar said the utility is seeking approval to spread out payments for generation costs reflected in its IEMOP bill.

He added that MORE Power has maximized its bilateral contracts and that changes in contracted rates remain minimal, but the biggest impact comes from the spot market.

“The biggest effect is what is in the market, the WESM, because it follows the law of supply and demand,” he said.

Lunar described the move as a proactive measure, noting that suppliers have started increasing their bids for power.

“The Modified Administered Price (MAP) does not reflect the actual market situation because it is based on historical [data]. It helped before, but now suppliers are recovering, and we have observed that bids are increasing compared to before,” he said.

In May, the ERC lifted the nationwide suspension of the WESM and resumed standard electricity trading operations.

As a result, the MAP emergency mechanism used during the suspension is no longer being applied.

During the market suspension, the ERC used the MAP mechanism to cap spot prices and shield consumers from volatile global fuel prices linked to tensions in the Middle East.

MORE Power said that, if approved, the staggered payment arrangement would allow generation costs to be reflected gradually in consumers’ monthly bills instead of being passed on in full immediately.

“The bill to customers would also be staggered. We would compute the adjusted rates once ERC approves the spread in payments reflected in the IEMOP bill,” Lunar said.

This is not the first time a distribution utility has sought such relief from the ERC.

In June 2024, the ERC approved a similar staggered payment scheme for Manila Electric Co. (MERALCO) covering increases in generation charges.

Lunar expressed confidence that the request would be favorably considered, citing ERC directives requiring distribution utilities to submit additional reports when blended generation rates increase significantly, particularly amid ongoing global fuel supply tensions.

MORE Power Spokesperson Angel Tan assured that there will be no increase or changes in the distribution charges which goes to the distribution firm.