Meralco to give refunds

Utility promises to abide by appeals court decision

MANILA Electric Co. said Thursday it will comply with the Court of Appeal’s ruling ordering it to refund its customers some P5 billion that it overcharged them from Nov. 2006 to August 2012.

Meralco will get the P5 billion from National Power Corp. and Power Sector Assets and Liabilities Management Corp. or PSALM representing the double charges that Meralco paid on “line rental adjustments” in the period covered.

The appellate court ordered the NPC and PSALM to refund Meralco a total of P5,176,147,098.73 covering the period, a sum that Meralco will then return to its customers.

The court said Meralco will receive P73,944,958.55 per month or its equivalent until the full amount it was overcharged—and which it in turn charged its customers—was fully refunded.

William Pamintuan, the head of Meralco’s legal office, told reporters that the country’s biggest power distributor will abide by the court decision affirming the order of the Energy Regulatory Commission in 2013.

“The decision of the CA affirming the ruling of the ERC on the refund of transmission line loss charges is a welcome relief to Meralco’s consumers,” Pamintuan said.

“Meralco shall abide and comply with any executable order from the court or the ERC in this regard.”

The appellate court had upheld the orders of the ERC issued on March 4 and July 1, 2013, directing the refund.

In its March 2013 decision, the ERC said National Power Corp. should refund Meralco P73.945 million per month until such time that the “over-payments” had been refunded in full. 

Meralco will then deduct the amounts it receives from Napocor from its monthly generation costs to reduce its generation charges to its customers. 

The double charging arose out of the simultaneous implementation of the transmission line rentals included in the Napocor-Meralco transition supply contract and the line rental charge imposed by Philippine Electricity Market Corp. for power procurement from the Wholesale Electricity Spot Market, both of which are ERC- approved.

In its decision dated March 10, 2010, the ERC confirmed the existence of double charging for line losses in view of the implementation of the 2.98-percent line-loss charge under Napocor’s supply contract with Meralco and the collection of line rentals from Meralco under the WESM.

PSALM, however, contested the ERC ruling and later on elevated the case to the Court of Appeals.

Meralco is the country’s biggest power distributor with 5.5 million customers.

PSALM manages the assets and liabilities of Napocor’s assets while the PEMC operates the country’s electricity spot market.

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