Visayas power consumers get refund

Visayan Electric Co. Inc. (Veco) is set to refund customers for overcollection of transmission and other bill components except power generation.

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

Veco, the second largest electric utility in the Philippines after Manila Electric Co., has about 370,000 customers and serves the cities of Cebu, Mandaue, Talisay and Naga, and the towns of Liloan, Consolacion, Minglanilla and San Fernando.

But in Cebu City, Julito Lopez, a Veco customer for 23 years, said the refund would not have a “big effect” on the monthly bill he was paying.

Lopez, a resident of Barangay Mambaling in this city, said his bill was reduced after he cut his use of appliances like the refrigerator and the freezer in his household.

He also attributed the decrease of his electric consumption to replacing regular fluorescent lamps with 40 watts with energy-saving fluorescent lamps that have 10 watts.

From a bill of at least P1,000 last year, he is now paying P700 to P800 this year.

However, it was only last month, he said, when their bill rose to P3,158.25 because of the frequent use of their air-conditioning unit.

With the refund set to be implemented next year, Lopez said, he might not feel it.

His household has an average monthly consumption of 95.62 kWh. Since the refund would only be P0.001 per kWh, his refund would amount to only P0.09562.

This will be deducted from his bill for that month.

In a statement, Sebastian Lacson, chief operating office of Veco, said the P0.001 per kWh refund or overrecovery was the net coming from the overrecovery and underrecovery based on the Energy Regulatory Commission (ERC) decision Case No. 2012-013 dated Nov. 10.

“The rates by which any distribution utility charges its customers are based on assumptions specified by regulatory guidelines and made on a going-forward basis for upcoming four-year periods. As a result, some assumptions on customer mix, generation cost and the like do deviate from the initial premises,” he said.

Lacson also said Veco, just like all other ERC-regulated entities, applied to the commission for the approval of overrecoveries and underrecoveries based on a formula on the various automatic cost adjustments and mechanisms set by the commission.

“Under this mechanism, the distribution utility refunds overrecoveries over four years but collects underrecoveries over eight years,” he added.

Veco is allowed overrecoveries amounting to P248,867,258.60 and underrecoveries amounting to P234,884,922.49.

Veco received the ERC order on Dec. 9. The refund will be reflected on the electric bills of Veco’s customers starting in March 2015, or three months after they received the ERC order.

Cebu Chamber of Commerce and Industry president Tess Chan said the refund was welcome news to businesses in Cebu.

“Anything to reduce costs of power,” she told the Inquirer in a text message.

“If the total amount of refund for all is only P15 million, the impact to individual companies may not be huge. Still, better than nothing,” she added.