ERC orders Luzon-based DUs to refund excess collections

The Energy Regulatory Commission (ERC) has directed more than 20 Luzon-based distribution utilities (DUs), whose over collection ranged between P5,000 and P146 million, to refund the excess amount to their customers.

Agnes Devanadera, the chairperson and chief executive of the ERC, said her group has issued separate orders for the refund of DU over collection between January 2017 and December 2019 for the following: Generation Rate, Transmission Rate, System Loss Rate, Lifeline Subsidy Rate and Senior Citizen Subsidy Rate.

“Upon our initial evaluation, the commission found that the Luzon-based DUs incurred over recoveries in the various pass-through charges that they collected from their customers. These pass-through charges should be revenue-neutral on the part of the DUs, and they are not allowed to incur any additional revenue or losses therefrom,” she said.

Devanadera said the ERC has adopted a policy that DUs with compliance filings with a resulting net over-recovery shall be directed to immediately refund the over-recovery, pending the complete and final evaluation of their applications.

The said resolution, she said, is in line with the principle that automatic adjustments of pass-through components of retail rates by DUs must be revenue neutral and any over recovery therefrom must be immediately refunded to their customers.

“The Commission resolved to prioritize the resolution of cases that will provide some customer relief in terms of rate reduction to help consumers cope with the still ongoing pandemic,” Devanadera said.

DUs are required under ERC Resolution 16, Series of 2009 to file their respective applications to the ERC once every three years to ensure that the recovery of the various pass-through costs is fair and proper.