Meralco ordered to refund consumers P5B in overpayments

MANILA, Philippines – The Court of Appeals ordered the Manila Electric Company (Meralco) to automatically refund consumers some P5 billion that it will recover from the National Power Corporation (NPC) and the Power Sector Assets and Liabilities Management Corporation (Psalm).

In a 20-page decision, the appeals court Special Second Division said it ordered both NPC and Psalm to refund Meralco a total of P5,176,147,098.73 covering the period of November 2006 to August 2012.

Meralco will be receiving P73,944,958.55 per month or its equivalent until the over-recoveries are fully refunded. The amount is the double charged paid by Meralco on Line Rental Adjustment.

The appeals court said that although Meralco became a mere-pass through of the transmission charges, the consumers ended up being doubly charged.

“In truth, it is the public that has been doubly charged. Meralco is enjoined to comply with the ERC order which directs it to refund to its customers by way of automatic deduction of the amount of refund to computed monthly generation rate for the amount it will recover from NPC/Psalm,” the appeals court said.

In June 2006, when the Wholesale Electricity Spot Market (WESM) started its commercial operations, new systems and protocols were introduced that included the allocations for transmission line losses.

However, since the NPC-TOU (Time of Use) was not revised, Meralco continued to pay transmission line losses to both NPC and WESM.

The appeals court, in its ruling, affirmed the March 10, 2010 decision of the Energy Regulatory Commission (ERC) ordering the refund and said that such order has attained finality.

“The doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice,” the appeals court said quoting a Supreme Court decision.

It added that “when a decision has attained finality, it can no longer be revisited even if the modification is meant to correct what is perceived to be an erroneous conclusion.”

The appeals court added that it couldn’t supplant the findings of the ERC on the propriety of the menthol to be used in implementing its decision.

“Courts as a policy should not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency,” the appeals court added.