The Metropolitan Waterworks and Sewerage System (MWSS) has penalized Maynilad Water Services Inc. due to failure to provide 24/7 water supply to its customers in BF Homes, Parañaque sometime in May.

In an advisory, the MWSS Regulatory Office (MWSS RO) said that it will conduct a virtual public information drive next week on the rebate program for Maynilad customers in Barangay BF Homes, Parañaque.

This, after the MWSS found out that Maynilad has failed to comply with its 24/7 water supply service obligation in the area for 24 consecutive days from May 5 to 29, 2021.

In April, Maynilad saw an increase of 36 million liters per day (MLD) in the customers' consumption under the service influence of Bagbag Reservoir due to high heat index during the summer season and the re-imposition of Modified Enhance Community Quarantine (MECQ) in the National Capital Region (NCR+) Bubble.

This resulted in water interruptions in various areas of the West Zone. And in response to the increase in demand, Maynilad's raw water allocation was increased from 2,400 MLD to 2,430 MLD from 23 April to 30 June.

But, according to MWSS RO, some areas under the service of Bagbag Reservoir still experienced rotational water interruptions despite the increase in allocation.

“As a consequence of the said non-compliance , Maynilad was penalized by the MWSS Board of Trustees (BOT) in the form of rebates to all affected account holders in Brgy. BF Homes, Parañaque,” MWSS RO said.

The agency said one of the objectives of the upcoming virtual information drive is to provide the affected Maynilad account holders in BF Homes information on the nature, scope, and other details of the implementation of the rebate program, as well as explain and clarify the bill rebates.

MWSS RO has yet to provide the amount of rebate that will be provided to Maynilad customers in BF Homes.

Recently, MWSS RO also announced that the removal of the Foreign Currency Differential Adjustment (FCDA) from the water bills will have a different impact on the respective customers of Maynilad and Manila Water Company, Inc.

Unfortunately, it will result in an upward adjustment on the monthly bills of Maynilad customers, but the MWSS RO made sure that the adjustment will not happen until 2023.

The FCDA is a quarterly-reviewed tariff mechanism that allows concessionaires to recover losses or give back gains arising from fluctuations in foreign exchange rates, as payments are made for foreign currency-denominated loans that are used to fund the expansion and improvement of water and sewerage services.

It is a corrective mechanism formulated by the MWSS RO to avoid under-recovery or over-recovery caused by forex movements.

Stating Nov. 18, the Revised Concession Agreements (RCA) of Manila Water and Maynilad will already take into effect.

The RCAs provide for the imposition of a tariff freeze until Dec. 31, 2022 and the removal of the FCDA.

For Maynilad, the removal of the currently implemented FCDA – which is equivalent to negative 0.55 percent of the 2021 Average Basic Charge of P36.24 per cubic meter (cu.m) or negative P0.20 per cu.m – from customers’ bills will result in the increase of Standard Rates for water and sewage services.

MWSS RO said that in order to protect customers from such an increase and retain the Concessionaire’s current rates, the FCDA will be converted into “Transitory Adjustment” in the customers’ bills from 18 November 2021 to 31 December 2022.

The Cash Flow effect of the FCDA removal will be considered in the calculation of the Opening Cash Position of the Concessionaire in the 5th Rate Rebasing Exercise, which is an audit of the water utilities' past performance and projection of their future cash flows.

Done every five years, the current rate rebasing period will end in 2022. It is supposed to set the water rates at a level that would allow both Maynilad and Manila Water to recover and earn a rate of return from the investments they spent for their respective water projects.