ERC looking into Non’s claim Meralco owes P150 billion refund

The Energy Regulatory Commission is looking into a former ERC commissioner's claim that the Manila Electric Company (Meralco) owed P150 billion in refunds to its customers.

Former Commissioner Alfredo Non had earlier claimed that Meralco owed customers a refund based on a re-computation of its weighted average cost of capital (WACC).

In a Viber message, ERC Chairman and CEO Monalisa Dimalanta said the power industry regulator received a copy of the computations submitted by Non.

“It was submitted as part of the Motion for Reconsideration in the case so we will resolve it as part of the case,” Dimalanta said.

To recall, early last month, Laguna Representative Dan Fernandez said that Meralco’s WACC should only be 9.62% given that the company’s power distribution already covered 70% of Luzon.

Meralco’s WACC has been at 14.97% since 2015.

Fernandez pointed to the unadjusted WACC as the key reason for consistently high power rates, which were among the highest in Asia.

Fernandez said Meralco's current WACC was computed to allow the utility to cope with the Asian financial crisis but has remained unchanged even after the crisis, allowing the utility to collect higher rates.

Meralco spokesperson Joe Zaldarriaga, however, disputed Fernandez's claims and said Meralco’s rates were at par with the service it provides.

“Our rates and service are monitored strictly by the regulator and records show that we have always outperformed and have more than complied with the level of service expected from us,” Zaldarriaga said in an earlier statement to GMA News Online.

“As far as our rates are concerned, records will also show that at current levels Meralco's charges are lower than many jurisdictions in the country, which is the reason why some areas are clamoring for Meralco's level of service,” Zaldarriaga added.

WACC is one of the “building blocks” for computing power costs under the government’s rate-setting methodology called the Performance-Based Regulation.

Non’s computation also showed Meralco customers who consume 200 kilowatt-hours (kWh) monthly are entitled for a P2,700 refund each month.

Meanwhile, those who consume 300 kWh should be given a P9,500 refund each month, while those who consume 400 kWh are eligible for a P15,500 refund each month.

Customers who consume 1,000 kWh or more are eligible for a P51,000 refund each month.

The computation also included new rates that Meralco should charge its customers after the refund is completed.

GMA News Online reached out to Meralco for comment on Non’s claims, but they have yet to respond as of this posting.

According to the ERC schedule, the final determination for the fifth regulatory period rate reset for distribution utilities, including Meralco, is in March 2024.

Meralco had said that charges reflected in consumer bills had been reviewed and approved by the ERC and that it adhered to ERC orders on cost adjustments arising from regular reviews.

The power distributor also maintained that it had always operated above board and is compliant with laws. — DVM, GMA Integrated News