The Energy Regulatory Commission (ERC) has approved P13.885 billion worth of refund to Manila Electric Company (Meralco) that will translate to rate reduction of P0.1528 per kilowatt hour (kWh) in their customers’ electricity bills by next month.
As mandated by the regulatory agency, the refund process will be for 24 months or two years, and will be effective in the next billing period or in the March billing cycle.
The ERC further directed Meralco “to reflect the refund as a separate line item in the bills of its customers during the refund period.”
Across customer-classes, the calculated refund amounts would be as follows: residential and General Service A customers shall be at P0.2761 per kilowatt hour (kWh); General Service B customers at P0.1811 per kWh; General Power A customers at P0.0789 per kWh; government hospitals, metered street lights and charitable institutions (GHMSCI) at P0.1165 per kWh; flat street lights at P0.2870 per kWh; and generator wheeling at P0.0366 per kWh.
ERC Chairperson Agnes T. Devanadera apprised media that “the Commission approved Meralco’s prayer for the issuance of a provisional authority in order to allow their customers to immediately enjoy the benefits of the proposed refund and provide immediate rate relief especially during this time of pandemic.”
Meralco the filed an application for the P13.9 billion pay-back to customers, due to cost over-recoveries arising from the implementation of its actual weighted average tariff (AWAT) within the lapsed regulatory period from July 2015 to November 2020 of its performance-based rate setting (PBR) methodology.
In its order, the ERC emphasized that it is limiting the provisional authority it extended “only to the refund of the amount as applied by Meralco.”
And since the approval was just granted on an interim basis, the regulatory body stated that “all other allegations, assumptions and computations made in the instant application are still subject to the ERC’s extensive evaluation and pertinent rules on the matter.”
The ERC further stipulated “the refund is without prejudice to the outcome of the final evaluation of the application after completion of both technical and legal proceedings.”
Devanadera reiterated that “as a regulator of the electric power industry, the Commission in determining its actions on applications filed before it, has the consumer welfare as its primary consideration.”
Meralco stated that based on its computation, its AWAT for the lapsed period from 2015 to 2020 hovered at P1.4414 per kWh, while its approved rate had just been at P1.3810 per kWh; hence, there had been resulting over-recoveries that it will need to return to customers.
Further, the utility firm is seeking the regulator’s imprimatur to declare the true-up in its lapsed AWAT to have been resolved, following approval of the refund and until such time that a new rate has been determined for Meralco in the next regulatory period.