ERC orders Meralco to refund P13.88 billion

The Energy Regulatory Commission (ERC) has ordered the Manila Electric Co. or Meralco to refund more than P13.88 billion or equivalent to an average refund of PhP0.1528 per kilowatt hour to its customers in approximately twenty-four 24 months or until the amount is fully refunded.

“The Commission approved MERALCO’s prayer for the issuance of a provisional authority in order to allow their customers to immediately enjoy the benefits of the proposed refund and provide immediate rate relief especially during this time of pandemic,” ERC Chairperson and CEO Agnes VST Devanadera.

In its order, the ERC noted that it limits such provisional authority only to the refund of the amount as applied by Meralco. 

It said that except for authorizing the refund as applied, all other allegations, assumptions and computations made in the instant application are still subject to the ERC’s extensive evaluation and pertinent rules on the matter.

The power industry regulator also directed Meralco to reflect the refund as a separate line item in the bills of its customers during the refund period, which shall be as follows:
 

"With the petition we filed, Meralco hopes to put the PBR (performance-based-regulation) mechanism back on track, that we appreciate the provisional approval and that we will follow the order as this will provide much needed relief to our customers", Joe Zaldarriaga, Meralco vice president for Corporate Communications, said in a separate statement.

PBR is an internationally-accepted methodology which uses projections of operating and capital expenditures to enable the regulator to evaluate investment in facilities to meet customer requirements and prescribed service levels.

It also has a performance incentive scheme by which the regulator provides incentives and penalties to the utility to compel it to be more efficient and reliable, while maintaining reasonable rates and improving the quality of service to achieve pre-determined target levels.

Meralco, in its application, sought the ERC's confirmation of its actual Weighted Average Tariff (AWAT) as against the ERC-approved Interim Average Rate (IAR) to determine if there are any over or under recovery.

“As regulator of the electric power industry, the Commission in determining its actions on applications filed before it, has the consumer welfare as its primary consideration, thus, our decision to immediately authorize the refund. We hope that the reduction in rate could help our consumers cope with the still ongoing pandemic,” Devanadera said.

The ERC said that the refund order is without prejudice to the outcome of the final evaluation of the application after completion of both technical and legal proceedings.-NB/LDF, GMA News