PSALM to challenge ERC refund order

The Power Sector Assets and Liabilities Management Corporation (PSALM) on Monday said it will file a motion for reconsideration of the Energy Regulatory Commission's decision that the Manila Electric Company (Meralco) be refunded P5.176 billion by the National Power Corporation (Napocor) for overpayment due to double-charging of transmission line charges. In its March decision, the ERC directed Napocor to refund Meralco P73.945 million per month until it has been refunded in full. Meralco will then deduct the amounts from its monthly generation costs to reduce customers' generation charges. "The ERC, in its new ruling, adopted the straight discount method that Meralco proposed by deducting outright the 2.98 percent [line loss charge] from the Napocor time-of-use [TOU] rates," said PSALM president Emmanuel R. Ledesma, Jr. “This method failed to consider the fact that the line loss component of the Napocor-TOU rate is not analogous to the actual line loss imposed by the Philippine Electricity Market Corp., as they differ in terms of meter location.” The PSALM statement said that the ERC originally ordered PEMC to provide Napocor and PSALM its segregated line rental amounts for the transition supply contract quantities from the start of the WESM to compute the accurate amount of the refund. However, PEMC said that segregating the line rental (which bundles together line loss and line congestion) is not feasible. The ERC then ordered PEMC to submit another method of segregation of its line rental trading amounts, which PEMC has not yet done. With no breakdown available to identify how much PEMC is charging for the line loss, said Ledesma, “the ERC adopted Meralco's straight deduction method.” This, said PSALM, deviated from ERC's March 10, 2010 decision, which was final and executory. "The decision cannot be modified merely on the basis that one of the parties will be inconvenienced by its implementation," the PSALM official said. Ledesma said PSALM is bound by the transition supply contract and the Price Determination Methodology in the WESM. "PSALM cannot deviate from either until an effective segregation mechanism from PEMC is approved by the ERC," he added. — BM, GMA News