Power retailer Manila Electric Co. (Meralco) announced a possible P16-billion refund to consumers following the pronouncement of the Energy Regulatory Commission (ERC) treating its 5th regulatory year as a lapsed period, a top executive said.
Meralco senior vice president and head of regulatory management Jose Ronald Valles said the ERC reported that there was already a decision on Meralco’s 5th RP application, ruling that the “entire 5RP is already considered as lapsed and that Meralco will retain the P1.3522 rate.”
“We anticipate that once ERC has released the decision on our 5RP treating it as lapsed period and confirming that our rate for 5RP is pegged at P1.3522, instead of P1.57 per kilowatt-hour that Meralco has applied for, the ERC will direct Meralco to refund the average weighted actual tariff [AWAT] in excess of P1.3522 per kWh covering the entire 5RP,” Valles said.
He said that due to its sales mix, especially on times when Meralco residential customers consume more electricity than other customer classes, Meralco’s AWAT exceeds Meralco’s current final distribution rate of P1.3522 per kWh.
“We estimate the amount of refund to be at least P16 billion for the four-year period of 5RP. Note that the current rate of Meralco is lower than the P1.3810 previously authorized by ERC. This rate was reduced by almost P0.03 per kWh after a thorough review by ERC. Had ERC approved Meralco’s proposed P1.57 per kWh rate for 5RP during a reset proceeding, the amount of AWAT refund would have been zero to nil,” Valles said.
The new refund is expected to cover July 2022 to present.
Meralco earlier said that just like for other distribution utilities, rate reset applications were necessary to implement projects and programs that would ensure fulfillment of its mandate to deliver stable and reliable service to its customers.
“As a highly regulated entity, Meralco’s rates go through a rigorous regulatory review and approval process that include public hearings to ensure that they are fair and reasonable,” the company said.
ERC chair Monalisa Dimalanta, who is on a six-month suspension from Office of the Ombudsman, earlier said the ERC had already decided to dismiss Meralco’s rate application and “consider the fifth regulatory period as a lapsed period.”
This means that Meralco’s rate would remain unchanged until the end of the said period. Meralco is the country’s biggest power retailer with nearly 8 million customers in its franchise area.
