ERC orders refund of R6.9 B to customers; R0.7541/kwh bill reduction in 3 months
The Energy Regulatory Commission (ERC) has ordered power utility giant Manila Electric Company (Meralco) to refund R6.927 billion worth of estimated over-recoveries in the past three years – and this will translate to reduction of R0.7541 per kilowatt hour (kwh) per month in the bills of its customers from May to July this year.
The power regulator’s mandate is for the utility company “to immediately” enforce the payback to customers on what it labels as “overcharges,” but petitioned for by Meralco. The refund was prescribed to be undertaken in the next three billing cycles.
ERC Chairman Jose Vicente B. Salazar said “the refund should be reflected in the May, 2017 billing,” noting that this is warranted “so Meralco customers will feel its effects right away.”
He explained that such will “offset the remaining R0.22 per kWh to be collected this month due to the Malampaya shutdown.”
The Commission explained that on March 31 this year, Meralco formally filed a petition “to reflect the over-recoveries of R5.847 billion,” but this also lumped in R1.08 billion in real property tax payments sought as “deductions from the total refund.”
In the same filing, the utility firm pleaded “to refund the said amount for the next 36 months,” but the duration had been substantially shortened by the regulatory body.
The ERC emphasized that it “disallowed any deduction and instead ordered Meralco to pay over-recovery charges amounting to R6,927,086,686.38.” These over-recoveries accrued from January, 2014 to December, 2016.
Salazar said they want the refund consummated at the soonest possible time, taking into account the welfare of the electricity consumers as their priority.
He stressed “the order of refund reflects ERC’s commitment to ensure that power rates remain affordable and reliable without compromising the continuity of electricity services.”
In a text message to the media, Meralco Spokesperson Joe Zaldarriaga said the company “will await the said order of the Commission, but this was actually triggered by our compliance filing towards the end of March.”
He said “we filed an application with the ERC to confirm pass-through charges from 2014 to 2016. Part of our application was a prayer for provisional authority allowing Meralco to collect or refund any over- or underrecovery as may be determined by the Commission.”
The mandate on refund of overrecoveries by servicing power utilities is in line with the provisions of ERC Resolution No. 16 series of 2009 and ERC Resolution No. 23 series of 2010, requiring distribution utilities like Meralco “to file for over- or under-recoveries of pass-through rates charged against consumers.”
Pass-through components in the rates include generation, transmission and system loss charges, along with feed-in-tariffs for renewable energy capacities as well as subsidies for lifeline customers and senior citizens.
The ERC noted though that “recovery of real property taxes paid to local government units is not included and therefore should not be offset from the total refund amount.”