ERC orders Meralco to refund P21.8 billion

INQUIRER FILE PHOTO

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) will get another reprieve in their bills after the Energy Regulatory Commission (ERC) ordered the power distributor to refund a total of P21.8 billion in overcharges.

In a 68-page decision, the ERC directed Meralco to reimburse residential customers the amount equivalent to 87 centavos per kilowatt-hour (kWh).

This means that for a typical household that consumes 200 kWh a month, it will see a P174 refund in the bill beginning this month and in the next 11 months for a lump sum of P2,088. The regulator ordered the firm to implement the refund, in installments or in one go, within 12 months.

To ensure transparency, the refund shall be reflected as a separate line item in the bill.

ERC Chair Agnes Devanadera said the adjustments were made to reflect the final computation of a tariff-setting methodology by which power firms are able to collect distribution costs.

Typically, a distribution firm is given a five-year regulator-approved formula to compute distribution expenses. The overcharges covered the period July 2015 to June 2022.

“We wanted to ensure that all over-recoveries shall be refunded complete with interest,” Devanadera said in a statement.

Will comply

Meralco vice president and head of corporate communications Joe Zaldarriaga said the listed company would comply with the latest ERC order.

“We are currently studying the order so we can start reflecting this in the power bills this month,” Zaldarriaga said. “While we have yet to receive suppliers’ billings, there is a possibility that the refund can offset the expected increase in generation charge and lead to a reduction in the overall power rates for July.”

This is the fourth refund order issued by the ERC to Meralco since last year. It also ordered a refund of P13.9 billion in over-recoveries in January 2021, a P4.8-billion refund in February this year and a P7.7-billion rebate in March also this year, bringing the total refund for residential customers to P1.8009 per kWh, according to the ERC.

High court ruling

The refunds could also help offset the impact of a Supreme Court ruling allowing Meralco to collect, on a staggered basis, P22.64 billion in generation costs accrued in 2013.

“We will seek clarification with the ERC on how and when it will implement [the SC decision] in light of the continuing increase in fuel prices today, which may be an additional burden to our consumers,” Meralco head of regulatory affairs Jose Ronald Valles said, adding:

“We are hoping that any upward adjustment in the generation cost as a result of the SC decision can be implemented at some future time to allow ERC to finish its investigation.”

Valles said the court’s move authorizing the staggered collection of price increases in November 2013 should be a “big win for consumers” on the back of skyrocketing fuel prices.

Meralco had attributed the increase in generation costs back then to the maintenance shutdown of the Malampaya facility, which supplies natural gas to three major power plants where it buys electricity. It said it was forced to buy more expensive supplies from the Wholesale Electricity Spot Market, the marketplace for trading electricity as a commodity.

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