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The Manila Electric Co. (Meralco) is ordered by the Energy Regulatory Commission (ERC) to refund its customers a total of P278 million in net over-recoveries, which is equivalent to 1.07 centavos per kilowatt-hour, within a period of one year. Consumers however, would hardly feel this because those who consume 100 kWh monthly would only get P1.07 while it will only be P2.14 for those consuming 200 kWh.

ERC executive director Francis Saturnino C. Juan said, “While the reduction to the electricity bill may be minimal, the ERC’s actions actually averted a rate increase that would have been inevitable had Meralco been just allowed to recover what is due it, without commission putting it to task to immediately return to the consumers what is due them.”

This resolution covers Meralco’s three pending cases which pertain to over- and under-recoveries in its transmission charges and the implementation of its approved charges to recover certain under-recoveries in its purchased power adjustment (PPA).

The first case refers to the claim of Meralco for its under-recoveries in its transmission charges for the period June 2003 to July 2007, totaling P5.56 billion, and filed on September 2007. But Meralco was only allowed by ERC to recover P5.35 billion inclusive of carrying charges for its under-recoveries for the said period. ERC did not allow some of the amounts included in the application of Meralco because they were not substantiated or explained.

For the period August 2007 to August 2009, second application was filed pertaining to Meralco’s plea for provisional authority to refund net over-recoveries in its transmission charges of P4.5 billion. ERC however directed Meralco to refund a total of P5.17 billion, which should be implemented simultaneously with the commission’s decision on the aforementioned case.

With the two cases, Meralco would be collecting a net under-recoveries in transmission charges of P174 million. To cushion the impact on the utility company’s customers, ERC evaluated the company’s implementation of its charges in collecting PPA under-recoveries.

Based on its evaluation, ERC found that Meralco collected more and loner that it should have, which resulted in the net over-recovery of P452 million, inclusive with carrying charges. The decision on the three cases implemented simultaneously would result in net over-recoveries of P258 million for Meralco.

“The variance between MERALCO’s transmission costs and the revenues it earns based on the transmission charges that it is authorized to implement, causes these over- or under-recoveries. This variance can be attributed to several factors including the implementation of National Transmission Corp.’s new rates in November 2004, among others,” ERC explained.