Meralco customers to get refund in June

By Lenie Lectura – May 10, 2017

from Business Mirror

THE Manila Electric Co. (Meralco) said on Wednesday it would most likely implement next month an impending regulatory order on its application to refund consumers nearly P7 billion worth of over-recoveries incurred from 2014 to 2016.

“We would have to wait for the order, but if it will be released anytime soon, then we can implement it already in June,” Meralco Utility Economics Head Lawrence S. Fernandez said.

Energy Regulatory Commission (ERC) Commissioner Josefina Patricia Magpale-Asirit said an order is forthcoming. 

“We brought back to the commission to reconfirm. We have to reconfirm the order,” Asirit said, referring to an ERC press statement uploaded on its web site that was abruptly taken down on the same day.

The ERC press statement directs Meralco to refund its customers P6.9 billion worth of overcharges collected over the past three years. Asirit said the commission will soon release a final order on Meralco’s application filed on March 31.

Meralco’s filing is meant to reflect over-recoveries of the following pass-through costs: P4.91 billion in Generation Rate Over/Under Recovery (GOUR); P632.21 million in Transmission Rate Over/Under Recovery (TOUR); P1.24 billion in System Loss Rate Over/Under Recovery (SLOUR); P130.62 million in Lifeline Subsidy Over/Under Recovery (LSOUR); and P2.32 million in Senior Citizen Discounts and Subsidy Over/Under Recovery (SrDSOUR) for the period January 2014 to December 2016.

Fernandez said the over-recoveries stemmed from “timing issues”. He explained that over-recoveries related to GOUR, for instance, occurred due to lag in the recovery of generation costs from consumers.

Basically, the rate used to compute for the generation charge in a current billing moth is based on the generation cost incurred during the previous billing month, which is the supply month.

Given the recovery lag and the monthly changing generation costs, over/under recoveries are expected, as the generation cost for the current month is compared to the recoveries of the same month.

In the same application, Meralco asked the ERC to recover from consumers its real-property tax payments amounting P1.08 billion.

“Applicant proposed that GOR, TOR, SLOR and LSOR be refunded to the customers for a period of 36 months; SrDSOR be refunded to the customers for a period or one month; RPT payments be recovered from customers for a period of 36 months,” Meralco’s 11-page application read.

Based on ERC rules, distribution utilities in Luzon may file their respective consolidated applications every three years for the confirmation of pass-through charges.