MANILA, Philippines -- The Manila Electric Company has begun issuing meter deposit rebates ahead of the Energy Regulatory Commission’s timetable.

The rebates, originally scheduled for January, should total P2.8 billion, Meralco officials said. It would start with customers with the lowest monthly consumption.

“They can choose to receive the (meter deposit refund) amount in cash if it is P4,000 or less, or in check if it is more than P4,000,” Meralco first vice president and customer retail services head Roberto Almazora said in a statement. “[Customers may also] apply the amount to future electric bills, or apply the amount to current unpaid bills or amounts to be paid to Meralco.”

But after the good news comes the bad: The expected reduction of 14.61 centavos per kilowatt-hour (kWh) starting this month would not be realized as the distribution utility last Friday filed a motion to defer its ERC-ordered refund of another P3.9 billion in overcharges.

These over-collections were for the currency exchange rate adjustment (CERA) from June 2003 to December 2006. The CERA was meant to allow the distribution utility to recover changes in the principal of its foreign currency loans due to exchange rate fluctuations.

Meralco was supposed to give back to customers the P3.9 billion it collected, equivalent to 14.61 centavos per kWh, over a 12-month period, effective this month.

In an urgent motion for deferment docketed October 31, Meralco cited cash flow problems as the reason for its seeking relief from the CERA-related refund.

This came a mere four days after the ERC ordered a deferment of the implementation of Meralco’s new rates, which would hike current rates by an average of 14 centavos per kWh across all customer classes.

“Meralco respectfully asserts that the deferment of the implementation of its new distribution rate structure will result in substantial and tremendous impact on its finances, particularly its cash flow situation,” Meralco stated in its motion.

It also reasoned that it was still in the process of completing a P30-billion refund process stemming from overcharges incurred from 1994-2003. It had also just started its P2.8-billion meter deposit refund process.

“With all the foregoing circumstances, Meralco will not be in any financial position to immediately refund the aforementioned CERA refund, as doing so would mean suspending the implementation of important capital projects to the detriment of its consumers,” Meralco said.

“In fact, to be able to implement the CERA refund, Meralco will need to incur more debt in order to cover the around P300 million per month to be refunded. Considering that Meralco is already currently utilizing its available credit facilities to account for its cash shortfall due to its under-recoveries and to finance its capital expenditure program, the likelihood of Meralco being able to avail of other loan facilities is very remote ..., especially with the deferment of the implementation of its (performance-based regulation) rate relief,” it added.

As a result, Meralco sought the ERC’s approval to defer the CERA refund “until it is allowed to implement its PBR rate adjustment.”