Meralco ordered to refund P0.0731/kWh to customers

By Myrna M. Velasco – July 4, 2019, 6:41 PM
from Manila Bulletin

Power utility giant Manila Electric Company (Meralco) has been ordered to refund P0.0731 per kilowatt hour (kWh) to its customers in this July billing cycle — with the mandated rate reduction accounting for its unused regulatory reset cost.

The refund directive was not just applicable to Meralco, but across all servicing private distribution utilities (DUs) in the country – such as Visayan Electric Company (VECO) in Cebu; and Davao Light & Power Company, among others.

A calculation by the Energy Regulatory Commission (ERC) showed the scale of refund that must be reflected by the private DUs in their bills ranges from P0.04 to P0.08 per kWh.

“The ERC directed all privately-owned electric distribution utilities to refund the amount pertaining to the unutilized regulatory reset cost, with corresponding interest, to their respective customers,” the regulatory body has stipulated.

It qualified that this shall be a “one-time refund” and must be reflected in the consumers’ electric bills in the July billing cycle.

Following compliance to the refund order, the DUs are being subsequently directed to submit a report, “and the same shall be subject to the audit and review in the next regulatory reset to determine if further refunds are in order,” the ERC said.

Under the performance-based regulation (PBR) of tariff-setting, regulated private DUs are allowed to charge regulatory reset cost in their revenue requirement. The unused portion of that is the amount being mandated by the ERC to be returned to ratepayers in their July billing cycle.

As explained by ERC Chairperson Agnes T. Devanadera, “the Commission is of the view that the cost of regulation should be at the expense of the government and should not be a burden to the electricity consumers.”

Taking on from that premise then, the ERC chief emphasized that the amount collected as regulatory reset cost in the 3rd regulatory period which remained “unused” must be returned to the consumers.

“The Commission deems it prudent to refund the amounts collected by DUs for this purpose. In directing the refund, private DUs’ customers will be benefitted by the said regulatory reset cost refund,” Devanadera said.

The ERC chair further advised private DU customers “to check their electricity bills next month and find out if the regulatory reset cost refund has been effected,” including warranted interest charges.