The Energy Regulatory Commission (ERC) said the Manila Electric Company (MERALCO) should refund Php 150 billion to its customers.
In a report by the Business Mirror, former ERC Commissioner Alfredo Non said customers of MERALCO are eligible for a one-time refund of approximately Php 2,700 for those taking in 200 kWh per month; Php 9,500 for 300 kWh; Php 15,500 for 400 kWh; and Php 51,000 for those taking in 1,000 kWh or more.
ERC Chairperson Monalisa Dimalanta also shared the sentiment as they submitted a case with the refund as part of a motion of reconsideration.
Several lawmakers brought up the refund allegation during the most recent House Committee on Legislative Franchises meeting. However, MERALCO refuted the claims, stating that it lacked the authority to determine its tariffs because ERC approves them.
Moreover, Non clarified that MERALCO ought to reduce power rates following a recalculation of its weighted average cost of capital (WACC) by regulators.
The disputed refund resulted from MERALCO’s rate of Php 1.47 per kWh compared to the ERC’s provisional authority rate of Php 1.38 per kWh.
Non also highlighted an alleged “error” in provisional rates, asserting that instead of the reported P1.38 per kWh, it should be around P1.05 or P1.06 per kWh.
According to Non, Congressman Dan Fernandez pointed out two issues: a miscalculation from 2012 to 2015 and the Weighted Average Cost of Capital (WACC), suggesting a reduction from 14.97 percent to approximately 10 or 11 percent.
He asserts that a significant contributing cause to continuously high power rates is the unadjusted WACC. However, according to MERALCO, which cites its most recent WACC approval under Performance Based Regulation (PBR), the WACC setting is regulated.
For MERALCO, the WACC applied uniformly to private Distribution Utilities (DUs) in the same category, and the utility firm has not had a determined WACC since July 2015. MERALCO contends that it is the responsibility of the Energy Regulatory Commission (ERC) to formulate its computation, and recent studies confirm that MERALCO’s rates are “fair and reasonable.”