ELECTRICITY rates for this month should have spiked to P9.08 per kilowatt hour (kWh) but the Energy Regulatory Commission’s (ERC) refund order, which the Manila Electric Company (Meralco) immediately implemented, mitigated the rate hike.
On Friday, Meralco said the overall power rate this month for a typical household increased by P0.0278 per kWh to P8.8901 per kWh. This is equivalent to a P6 increase in the total bill of residential customers consuming 200 kWh. This month’s rate is lower than that of last March 2019, which was P10.4961 per kWh.
Meralco said an additional P0.19, due to higher generation charge, should have been added on top of the P8.89 per kWh. However, this was mitigated by a refund of over-recoveries in pass-through charges and a one-time adjustment in Universal Charge-NPC Stranded Contract Costs (UC-SCC).
“The March rate reflects the ERC-approved adjustments for Meralco’s over/under-recoveries in pass-through charges for the period January 2012 to October 2013.
These adjustments, to be implemented for a period of three months, are incorporated in the generation, transmission, system loss charges, and subsidies. For residential customers, the adjustments translate to a net reduction of P0.05 per kWh, excluding taxes,” Meralco said.
The ERC directed Meralco to implement a P0.1453 per kWh rate reversal in UC-SCC representing collections in excess of the amount due to Power Sector Assets and Liabilities Management Corporation (PSALM).
In its 28-page order to all distribution utilities (DUs), the ERC ordered them to refund to their respective consumers the total amount of P2.8 billion.
The ERC said the refund should be effected for a period of 12 months, except for Meralco and Angeles Electric Corporation (AEC) which asked for a shorter period of refund, starting on the next billing cycle from receipt of the ERC’s Order, or until such time that the full amount shall have been refunded, ERC Chairman and CEO Agnes VST Devanadera said.
Translated into rates, DUs will refund from as high as P1.3182/kWh to as low as P0.0025/kWh.
“The over-recoveries in the Generation, Transmission, and System Loss charges were incurred in view of the difference between the actual and the estimated costs of Generation and Transmission Charges (which were based on the previous month), whereas for the Lifeline and Senior Citizens charges, the over-recoveries were due to the variance in the discount granted as against the actual subsidy charged and collected,” said the ERC.
The DUs were likewise directed to submit within 10 days from their implementation a sworn statement indicating their compliance with the ERC’s Order.
Pursuant to ERC Resolution No. 16, Series of 2009, which adopted the Rules Governing the Automatic Cost Adjustment and True-Up Mechanisms and Corresponding Confirmation Process for Distribution Utilities, the DUs are required to file their respective applications for the confirmation and approval of calculations of over- or under-recoveries in the implementation of automatic cost adjustments and true-up mechanisms every three years.
“The confirmation of the DUs’ pass-through charges are meant to protect the interest of the consuming public by way of ensuring that what were charged and collected from them are reasonable and accurate rates,” Devanadera added.
Image credits: Nonie Reyes