ERC orders Meralco to refund distribution-related charges amounting to Php21.8B

The Energy Regulatory Commission (ERC) has given an order directed to Manila Electric Company (Meralco) to refund its customer for over PHP 21.8USD 0.37INR 31EUR 0.35CNY 3 billion of distribution-related charges.

Covering the period of July 2015 to June 2022, the 72-page decision pegged the distribution-related charges at PHP 21,769,496,221USD 370,952,216INR 31,448,214,241EUR 353,318,924CNY 2,701,594,481 or an average refund rate of P0.4790 per kWh.

An excerpt from the latest ERC decision, dated June 16, 2022 (promulgated on July 5, 2022)

This is the fourth refund directive by ERC since 2021 following per order dated January 27, 2021 for PHP 13.9USD 0.24INR 20EUR 0.23CNY 2 billion; as per supplemental order dated February 23, 2022 PHP 4.8USD 0.08INR 7EUR 0.08CNY 0.60 billion; per order dated March 8, 2022 (covered by various other cases) for PHP 7.7USD 0.13INR 11EUR 0.12CNY 0.96 billion; and per decision dated June 16, 2022 for PHP 21.8USD 0.37INR 31EUR 0.35CNY 3 billion.

“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),” said ERC Chairperson and CEO Agnes Devanadera.

“We wanted to ensure that all over-recoveries shall be refunded complete with interest,” she added. Thus, the current total refund rate—including the latest refund order—now amounts to PHP P1.8009/kWh—about PHP 360USD 6INR 520EUR 6CNY 45 refund for residential customers who consume 200kWh.

On the other hand, Meralco said it would act in accordance with the ERC’s decision, and that the latest refund would be implemented on the next billing cycle (July 2022) from Meralco’s receipt of cited decision.

“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,”  Meralco vice president and head of corporate communications, Joe Zaldarriaga said in a statement.

“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,” he added.

The ERC said Meralco’s earlier refunds will be implemented until 2023.

“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,” Devanadera said. “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.”

Source (ERC CASE NO. 2020–043 RC DECISION) (2) (3)