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Meralco seeks rate hike amid higher excise tax on coal

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Manila Electric Co. (Meralco) is asking the Energy Regulatory Commission (ERC) for provisional authority to adjust the price of electricity in its power supply agreement (PSA) with a plant in Pagbilao after the tax reform law raised the excise taxes on coal.

The rate hike application, jointly filed by Meralco and Thermal Luzon, Inc., sought an increase in the power generation cost of P0.0187 per kilowatt-hour (kWh) this year, P0.0425/kWh in 2019, and P00.667/kWh in 2020 and beyond, should the extension of their PSA is approved.

“Among other things, the TRAIN Law increased the excise tax on coal from PhP10.00/metric ton to PhP50.00/metric ton, effective January 1, 2018. This tax is to increase year on year, up to PhP150.00/metric ton for coal, effective January 1, 2020,” their joint application said.

Ahead of the start of the ERC hearing on the application in September, the companies are asking for provisional authority to adjust the terms of their PSA, and for Meralco to get provisional approval to start collecting the increase from its customers.

The generation cost is collected by Meralco from its customers. It is then remitted to the power generation company. — Victor V. Saulon