ERC found the rate—which was the proposed rate of Meralco and Solar Philippines—to be reasonable since it is lower than its computed true cost generation rate of P6.941 per kwh. The rate underwent a competitive selection process (CSP), and is lower than the prevailing solar feed-in-tariff (FIT) rates. Previously, the ERC issued an interim relief to Meralco and Solar Philippines to implement the PSA at its applied rate but without the escalation rate. In 2017, Meralco foresaw peaking capacity deficit in its portfolio, especially for the summer months amid expected high demand.