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Meralco to refund customers for generation charges

Power distributor Manila Electric Company (Meralco) said it would refund its customers for generation charges following recent adjustments in Malampaya gas prices.

Ronald Valles, senior vice president and head of regulatory management for Meralco, said the refund would be implemented after receiving word from the Energy Regulatory Commission (ERC) on the matter.

"We have received the reply of ERC Chair to our various letters. Based on ERC's guidance, we are ready to implement a refund in generation charges corresponding to the increase in the Malampaya gas price of First Gas plants for January supply month," Valles said.

According to a report Friday on Saksi, a letter by the ERC urged Meralco to complete its review to justify its rate adjustment following the recently signed agreement between the Malampaya Consortium and First Gas Power Corporation.

"While MERALCO admits that a validation of the impact of the use of LNG (liquefied natural gas) and the new gas supply contracts is necessary in light of the terms of its power purchase agreements (PPAs), up to this date, the ERC has not been provided with the results of MERALCO'S validation," a letter by the ERC read.

"Pending MERALCO's validation of the basis of such charges, passing on of such costs to the consumers may be premature," ERC Chairperson and CEO Atty. Monalisa Dimalanta said.

Meralco raised its household electricity rate by 57.38 centavos per kilowatt-hour (kWh) for February, bringing the the power distributor’s overall rate for a typical household to P11.9168 per kWh from P11.3430 per kWh in January.

The upward adjustment translates to an increment of about P115 in the total bill of a residential customer consuming 200 kWh.

Meralco said the increase in the electricity rate was due to the hike in generation charge by 45.52 centavos to P7.1020 per kWh from P6.6468 per kWh last month, primarily due to higher cost of power from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).

This was the second time this year that the power distributor hiked its household power rate after raising it by  8.46 centavos per kWh last month. — Jamil Santos and Ted Cordero/ VDV, GMA Integrated News