Meralco is ordered by ERC to refund PHP 21.8 billion

The Manila Electric Company (Meralco) has been ordered by the Energy Regulatory Commission (ERC) to reimburse its customers for more than PHP 21.8 billion in distribution-related fees.

The 72-page ruling estimated the distribution-related costs at PHP 21,769,496,221 (or an average refund rate of P0.4790 per kWh) for the period of July 2015 to June 2022.

An Excerpt From The Latest Erc Decision, Dated June 16, 2022 (Promulgated On July 5, 2022)

Following an order dated January 27, 2021 for PHP 13.9 billion, a supplemental order dated February 23, 2022 for PHP 4.8 billion, an order dated March 8, 2022 (covered by a number of other cases) for PHP 7.7 billion, and a decision dated June 16, 2022 for PHP 21.8 billion, this is the fourth refund directive issued by the ERC since 2021.

“The Commission endeavored to review the rate components that can be adjusted under the existing rules. In particular, we made adjustments on the Regulatory Asset Base (RAB) and recomputed the Interim Average Rate (IAR),” said ERC Chairperson and CEO Agnes Devanadera.

“We wanted to ensure that all over-recoveries shall be refunded complete with interest,” she added. Thus, the current total refund rate—including the latest refund order—now amounts to PHP P1.8009/kWh—about PHP 360 refund for residential customers who consume 200kWh.

Meralco, on the other hand, stated that it will follow the ERC’s ruling and that the most recent refund would be effected starting with the next billing cycle (July 2022), upon Meralco’s receipt of the aforementioned ruling.

“We will comply with the ERC’s directive. We are currently studying the order so we can start reflecting this in the power bills this month,” Meralco vice president and head of corporate communications, Joe Zaldarriaga said in a statement.

“While we have yet to receive suppliers billings, there is a possibility that the refund can offset the expected increase in generation charge and lead to a reduction in the overall power rates for July,” he added.

The previous refunds from Meralco will be in effect until 2023, according to the ERC.

“We are confident that our decision exercised fairness, and promoted the interests of the consuming public who bears the brunt of all these electricity charges,” Devanadera said. “Let’s not forget that the provision of electricity is a public service and providers should only earn just and reasonable return on their investments.”

Source: (ERC CASE NO. 2020–043 RC DECISION) (2) (3)

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