ERC recomputes, orders ₧21.8-B refund by Meralco

THE Manila Electric Company was ordered by the Energy Regulatory Commission (ERC) to return to its customers a total of P21.8 billion after the agency recomputed the numbers submitted by the utility firm.

The 68-page decision in ERC Case No. 2020-043 RC directed Meralco to refund its customers an average of P0.4790 per kilowatt hour (kwh), covering the period from July 2015 to June 2022. The refund will be implemented in the next billing cycle from Meralco’s receipt of the decision.

Meralco, for its part, said it has received the ERC’S order on the refund of distribution-related charges. The refund order, it added, is equivalent to 87 centavos per kwh for residential customers. “We will comply with the ERC’S directive. We are currently studying the order so we can start reflecting this in the power bills this month,” it said on Wednesday.

In its decision, the ERC further directed Meralco to effect the refund in approximately 12 months or until the amount is fully refunded to its customers, and to reflect the refund rate as a separate line item in the bills of Meralco’s customers during the refund period.

“The Commission endeavored to review the rate components that can be adjusted under the existing rules. In particular, we made adjustments on the Regulatory Asset Base (RAB) and recomputed the Interim Average Rate (IAR). We wanted to ensure that all over-recoveries shall be refunded complete with interest,” ERC Chairperson and CEO Agnes VST Devanadera said.

The ERC’S refund directive is the fourth since January 2021. The three other refund orders include the P13.9 billion as per ERC order dated January 27, 2021; P4.8 billion as per supplemental order dated February 23, 2022; and P7.7 billion as per ERC order dated March 8, 2022.

Meralco’s previous refunds are to be implemented until 2023. Thus, the updated total refund for residential consumers is now at P1.8009/kwh to include the latest P21.8billion refund.

“The Commission has carefully evaluated the ease at hand of Meralco and considered the views and concerns of the various stakeholders. We are confident that our Decision exercised fairness, and promoted the interests of the consuming public who bears the brunt of all these electricity charges. Let’s not forget that the provision of electricity is a public service and providers should only earn just and reasonable return on their investments,” Devanadera added.

Meralco said the latest refund order will likely result in lower power rates. “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,” it said.