Exec: Meralco to issue refund

By Lenie Lectura – February 15, 2024
from Business Mirror

The Manila Electric Co. (Meralco) said Wednesday it will likely start processing refunds next month after it was called out by the Energy Regulatory Commission (ERC) for passing on to consumers the cost of procuring power from plants fueled by liquefied natural gas (LNG).

However, the refund amount has yet to be finalized, according to Meralco Spokesman Joe Zaldarriaga. “There is no available figure yet for the refund as we are still computing it, but most likely the refund will happen in March.”

Meralco had included in the February electricity bills the impact of the use of LNG cost imposed by power generation companies when Meralco has yet to validate this.

The ERC, in a letter to Meralco dated February 12, urged the distribution utility (DU) firm to complete the validation to justify the rate adjustment. The agency said it will not allow Meralco to recover such costs if the company itself has not completed its validation or provided the results of such validation.

“Pending Meralco’s validation of the basis of such charges, passing on of such costs to the consumers may be premature,” ERC Chairperson Monaliza Dimalanta said.

Meralco is awaiting the gas supply contract entered into by First Gen Corp. and its gas supplier before it can thoroughly evaluate the LNG cost. “We are still waiting for it but we already asked for a copy of the contract.”

Prior to the ERC letter, Meralco said it sought guidance from the ERC on how it should proceed.

“We wrote them about it,” said Meralco First Vice President and Regulatory Management head Ronald Valles. However, Meralco proceeded to incorporate the LNG cost into the power generation component prior to the issuance of the ERC letter.

Nonetheless, Meralco vowed to comply with the directive of the ERC.

“We are ready to implement a refund in generation charges corresponding to the increase in the gas price of First Gas plants for the January supply month. As these are pass thru costs, we will also not be in a position to pay the equivalent cost to First Gas,” said Valles.