ERC: Meralco to collect P8.7 billion from customers over pass-through charges

The Energy Regulation Commission has directed Meralco to collect P8.7 billion from customers after confirming the power utility's over-recoveries and under-recoveries in pass-through charges for the period from February 2011 to December 2022.

In a statement, the ERC said that Meralco may collect the amount of P8,708,841,958.41 from customers over a period of 36 months. The amount, it said, is the net balance remaining after verifying "the amounts Meralco has already refunded or collected from customers" during the period.

Pass-through charges are charges in the electricity bill that Meralco collects on behalf of other entities—such as, the ERC said, the National Grid Corporation of the Philippines for transmission; and government agencies for taxes. The utility company does not earn money from these charges.

"Because pass-through charges are determined based on the previous months' electricity sales during the month of implementation, the amount a [utility like Meralco] is able to collect each month does not always exactly match its actual, allowable costs," the ERC said.

Because of this, the utility will perform a "true-up," or a process by which it will compute and reconcile what it collected against the actual charges.

"This ensures that [utilities] charge their customers only what they are properly allowed to charge: neither more (an over-recovery) nor less (an under-recovery)," the commission said.

According to the ERC, during this period Meralco over-recovered the following amounts, meaning they have to be refunded to customers:

• Lifeline subsidy: P554,786.62 to be refunded to non-lifeline customers
• Senior citizen discount subsidy: P2,245,648.42 to be refunded to subsidizing customers
• Local franchise tax: P27,337,032.70 to be refunded to customers in areas with over-recovery

In the meantime, Meralco under-recovered in these areas, and the following amounts will have to be collected from customers over 36 months:

• Generation cost: P7,299,118,754.00 at a collection rate of P0.07/kWh
• Transmission cost: P615,933,796.23, with the collection rates varying per customer class
• System loss: P545,051,408.32, with the collection rates varying per customer class
• Real property tax: P228,875,467.60

The order comes after the ERC ordered Meralco to refund customers P9,506,566,556.00 within six months' time.

The P9.5-billion refund means that Meralco residential customers would have been entitled to a refund of about P0.59 per kilowatt-hour (kWh). However, with the new order Meralco will collect P0.07 per kWh, meaning that the refund will be slightly lower. — BM, GMA News