ERC orders Meralco: refund P7.75 billion to users

Power lines run beside a sign for the Manila Electric Co. (Meralco) Makati branch in Manila, the Philippines, on Monday, March 23, 2009. Manila Electric Co. is the largest Philippine power retailer. Photographer: Nana Buxani/Bloomberg News

THE Manila Electric Co. (Meralco) was directed to refund customers a total of P7.75 billion, which is equivalent to P0.47 per kilowatt hour (kWh) for residential customers, to be carried out this month.

In a 51-page order, the Energy Regulatory Commission (ERC) said its review of Meralco’s regulatory asset base (RAB) resulted in a reduction of the utility firm’s previously approved RAB for the Third Regulatory Period (3rd RP).

“This reduction requires Meralco to refund the amount of P7.75 billion for a period of 12 months, equivalent to refund to residential customers of 46.69 cents per kwh. This is equivalent to a P93 refund for a residential customer consuming 200 kWh,” ERC commissioner Atty. Rexie Digal said Wednesday.

The ERC order, dated March 8, was made public on Thursday afternoon. In evaluating the said issue, the Commission considered the principle of full recovery of prudent and reasonable cost as required under Electric  Power Industry Reform Act (Epira).

“With the re-computation of the opening RAB for the 3rd Regulatory Period [RP] of Meralco, the Commission conducted further review in relation to the inflationary considerations and assumptions regarding the RAB incorporated in the calculations used in the 3rd RP,” the agency said.

Meralco confirmed this. “The refund will appear as a separate line item in the power bills starting May,” it said.

Of the P7,755,444,758 to be refunded to Meralco customers, P4,868,719,146 (P0.4669 per kWh) is for Residential and General Service A; P441,844,751 (P0.3063 per kWh) for General Service B; P2,353,343,357 (P0.1334 per kWh) for General Power; P32,422,886 (P0.1971 per kWh) for Government Hospitals, Metered Streetlights, and Charitable Institutions; P43,539,550 (P0.4853 per kWh) for Flat Streetlights; and P15,575,068 (P0.0619 per kWh) for General Wheeling.

“In view of the following, and pursuant to Sections 2 and 41 of the EPIRA, the Commission hereby issues an interim relief to allow the implementation of the foregoing refund to ensure the promotion of consumer interest, subject to the final evaluation of the respective instant applications,” the ERC said.