Power utility giant Manila Electric Company (Meralco) will refund P0.05 per kilowatt hour (kWh) in March billing to customers, which accounts for the charges it passed on from the new gas sale and purchase agreement (GSPA) that its power supplier First Gen Corporation had sealed with the Malampaya consortium.

Energy Regulatory Commission (ERC) Chairperson Monalisa C. Dimalanta said the refund “will be for the new gas rates” under the GSPA for fuel drawn from the Malampaya field and fed into the power plants of First Gen in Batangas.

According to Meralco, the incremental cost recovery in the Malampaya-linked new GSPA hovered at $2.3 million, and that had been integrated in the cost pass-on in the last billing cycle.

“What we could not validate is the new Malampaya price, because we were waiting for the copy of the new GSPA, hence, that will be the portion for refund,” the ERC chief noted.

Dimalanta qualified that the bigger portion of the pay-back to customers at P0.30 per kWh would have accounted for charges passed on from the power suppliers’ cost of liquefied natural gas (LNG), but since Meralco had filed a motion on that, there is no refund order yet issued by the regulatory body.

“They filed a motion last Monday (February 19) to officially request if they can charge that (LNG cost) effectively. That’s what they’re asking in their motion,” she stressed.

Dimalanta opined “it would be a better recourse that they filed (the motion) because it’s better that we make the process public – especially something that affects the rates… this cannot be resolved by mere exchange of letters.”

She narrated that the preliminary step taken by Meralco was to send an official letter to the ERC seeking clarity if they can pass on charges arising from cost adjustments in the new GSPA as well as the LNG fuel shift of the generating facilities of First Gen, primarily the Santa Rita plant.

Dimalanta specified though that the Commission cannot render a ruling if the measure taken would just be through letter, “we cannot set that for a hearing, that’s why they (Meralco) filed a motion.”

Meralco conveyed “what we filed was recovery of LNG during commercial operations, not during testing and commissioning, as that was covered by the PPA (power purchase agreement) already.”

In a letter to the ERC chief, Meralco Senior Vice President and Head of Regulatory Management Jose Ronald V. Valles stated “with respect to the use of LNG during test and commissioning, Meralco has validated that the LNG costs are cheaper than liquid fuel.”

Further, on LNG utilization during commercial operations, he reiterated Meralco’s intent on filing “the appropriate urgent motion/s in the relevant ERC cases, to urgently seek approval of the recovery from customers and Meralco payment of attendant costs of LNG during commercial operations,” thus, that prompted the utility firm to file its motion early this week.

Nevertheless, Dimalanta indicated that the Meralco filing may not be tackled in this week’s Commission meeting yet; so there is high probability that any refund or adjustment in the rates relating to the motion may no longer be reflected in the March billing.