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Meralco ordered to refund customers over P21.76B in distribution-related charges

The Energy Regulatory Commission (ERC) has ordered the Manila Electric Company (Meralco) to refund its customers for distribution-related charges amounting to almost P21.8 billion.

In a decision, the ERC pegged the distribution-related charges at P21,769,496,221 or an average refund rate of P0.4790 per kWh, covering the period July 2015 to June 2022.

The ERC said the refund would be implemented in the next billing cycle from Meralco’s receipt of the decision.

“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)," ERC Chairperson and CEO Agnes Devanadera said in a statement.

"We wanted to ensure that all over-recoveries shall be refunded complete with interest."

The ERC said this is the fourth refund directive since January 2021 following the P13.9 billion as per order dated January 27, 2021; P4.8 billion as per supplemental order dated February 23, 2022; P7.7 billion as per order dated March 8, 2022 (covered by various other cases); and P21.8 billion as per decision dated June 16, 2022.

“Thus, the updated total refund for residential consumers is now at P1.8009/kWh to include the latest P21.8 billion refund,” it added.

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

The ERC directed Meralco to implement 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 has carefully evaluated the case 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,” 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,” she added.

In a statement, Meralco said it would abide by the ERC's 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,” the company said.

“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." —VBL, GMA News