Power utility giant Manila Electric Company (Meralco) had been ordered to refund P1.4 billion worth of over-collections on pass-through charges relating to transmission rate; lifeline subsidy rate and senior citizen subsidy rate.

Nevertheless, the customers of the utility firm will not fully enjoy the ordered refund, because Meralco was also directed to collect under-recoveries of heftier P2.38 billion and that will in turn be passed on as added charges in the electric bills.

Essentially, there will just be offsetting in the pass-through charges in the power firm’s electric bills; although the refund will be enforced for three months; while the collection of additional charges will be for 24 months.

For the refund, the calculated amount by the ERC had been at average P0.1331 per kilowatt hour (kWh) within the prescribed three-month period; while the under-recoveries will be passed on for two years at P0.0395 per kWh in every billing cycle.

The regulatory body noted that upon review of the utility firm’s submitted data for the periods from January 2017 to December 2019, it validated the calculated over-recoveries on the specified charges; while also determining the under-recoveries on generation rate.

ERC Chairperson Agnes T. Devanadera noted that the regulatory body explored means “such as stretching the collection of any under-collection to a longer period and effecting a quick refund for over-collection, in order to temper the impact on consumers’ bill.”

The ERC specified that Meralco must refund the estimated over-recoveries within the prescribed period; and it will also be allowed to collect the under-recoveries for a longer duration.

“ERC ordered Meralco to refund the over-recoveries at an average rate of P0.1331 per kWh, for a period of approximately three months until fully refunded; and to collect the computed under-recovery in the generation rate, with an equivalent rate of P0.0395 per kWh, for approximately 24 months until fully collected,” the regulatory body reiterated.

The ERC further directed that the refund of the over-recoveries; as well as the collection of under-recoveries shall start in the next billing period – upon receipt by Meralco of the regulatory agency’s order.

Additionally, Meralco has been instructed to submit within 10 days from its implementation a sworn statement indicating its compliance to the order of the ERC.

The re-calculation of under-recoveries as well as over-recoveries of distribution utilities is prescribed under ERC Resolution No. 16 Series of 2009, mandating the DUs to file their respective applications once every three years for the regulator to ascertain that the various pass-through charges had been carried out fairly and judiciously.