Visayan electric consumers to get refunds from VECO

MANILA, Philippines — The Visayan Electric Co. Inc. (VECO) is set to refund customers for over-collections related to transmission and other bill components except power generation.

Regulators have approved VECO’s application on over- and under-recoveries of billing components, but modified the amounts applied for. The result is a net refund of P0.0891 per kilowatt-hour for residential customers of VECO.

VECO is the second largest electric utility in the Philippines after the Manila Electric Co. and serves the cities of Cebu, Mandaue, Talisay and Naga and four municipalities of the greater part of Metro Cebu – Liloan, Consolacion, Minglanilla and San Fernando. VECO’s franchise service covers an area of about 672 square kilometers with an estimated population of 1.73 million.

Based on VECO’s presentations, the Energy Regulatory Commission (ERC) came up with a computation of VECO’s over- and under-recoveries for the period November 2004 to December 2012.

VECO was directed to refund the transmission cost over-recovery of P182.1 million, equivalent to various rates per customer class. The rate for residential customers is P0.0911 per kWh. VECO was also told to refund the system loss over-recovery of about P25.7 million, equivalent to P0.0028 per kWh; lifeline subsidy over-recovery of P1.9 million, equivalent to P0.0002 per kWh; inter-class cross subsidy over-recovery of P34.4 million, equivalent to P0.0061 per kWh; and prompt payment discount (PPD) over-recovery of almost P4.8 million, equivalent to various rates per customer class — for which the rate for residential customers is P0.0016 per kWh.

Meanwhile, VECO was authorized to collect the generation cost under-recovery of P234.9 million, equivalent to P0.0127 per kWh.

To give VECO enough time to adjust its billing system, ERC said the distribution utility may refund over-recoveries and collect the under-recovery starting on the third billing cycle from the receipt of the ERC decision, “or until such time that the full amount shall have been fully refunded/collected.”

The interclass cross-subsidy is charged to higher income customers to subsidize lower-income power consumers.

The PPD covers discounts to customers who have been paying their power bills in full on or before the 15th day of the month following the billing statement. The PPD was aimed at encouraging customers to increase their collection efficiency, pay their power bills on time as well as to minimize the build-up of receivables.