Republic of the Philippines


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ERC Orders MERALCO to Refund Over Collections

The Energy Regulatory Commission (ERC), in a recently released Order, directed the Manila Electric Company (MERALCO) to refund to its consumers its over collections in the following pass-through charges: Transmission Rate (TR), System Loss Rate (SLR), Lifeline Subsidy Rate (LSR), and Senior Citizen Subsidy Rate (SrCSR).  The ERC, upon review of MERALCO’s submitted data for the period from January 2017 to December 2019, validated the over recoveries in the said pass-on charges.  It was also confirmed, however, that MERALCO likewise incurred under recoveries in the Generation Rate (GR).  

“The Commission’s initial evaluation of the documents submitted by MERALCO revealed that it (MERALCO) incurred a total over collection amounting to PhP1.4 Billion in the Transmission, System Loss, Lifeline Subsidy and Senior Citizen Discount Rates, but also incurred a total of PhP2.38 Billion under collection in the Generation Rate.” ERC Chairperson and CEO Agnes VST Devanadera explained.    

In its Order, the ERC directed MERALCO to implement its over and under-recoveries, by way of refunding and collecting the same, subject to the final evaluation by the Commission.  ERC ordered MERALCO to refund the over-recoveries at an average rate of PhP0.1331/kWh, for a period of approximately three (3) months until fully refunded, and to collect the computed under-recovery in the Generation Rate, with an equivalent rate of PhP0.0395/kWh, for approximately twenty-four (24) months until fully collected starting on the next billing cycle upon receipt of the ERC’s subject Order.  ERC directed a longer period for MERALCO to collect the under charges in order to protect the consuming public by mitigating the impact of the said under-recovery collection.

Moreover, MERALCO was directed to reflect the over and under-recoveries in the monthly computations of GR, TR, SLR, LSR and SrSR as “OGA” for Generation, “OTCA” for Transmission, “OSLA” for System Loss, “OLRA” for Lifeline Subsidy, and “OSrRA” for Senior Citizen Subsidy.  MERALCO is required to submit within ten (10) days from its implementation a sworn statement indicating its compliance with the ERC’s relevant Order.

Distribution Utilities (DUs) are required under ERC Resolution No. 16, Series of 2009 to file their respective applications to the ERC once every three (3) years in order to ensure that the recovery of the said various pass-through costs is fair and proper.

“Let it be emphasized that the Commission, in acting on the pass on charges confirmation has the consumers’ welfare as its primordial consideration.  We will find means, such as stretching the collection of any under collection to a longer period and effecting a quick refund for over collection, in order to temper the impact on consumer’s bill.” ERC Chair Devanadera added.


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