The Manila Electric Co. (Meralco) has filed for under- and over-recovery claims with the Energy Regulatory Commission (ERC) for years 2020 to 2022.
This developed as the regulatory body said it is processing the approval of the majority of 36 Ancillary Services Procurement Agreements (ASPAs) entered into by the National Grid Corporation of the Philippines (NGCP) through competitive selection process.
Ancillary services (AS) serve as the available generating capacity for dispatch to meet contingency reserve requirements when a power generating unit trips or a transmission interconnection problem occurs.
In a filing submitted by Meralco to the ERC on April 26 but was only made public by the regulatory body on June 1, the company claims for under-recovery totaling to P8.01 billion equivalent to a rate uptick of P0.22 per kilowatt hour (kWh) for 12 months.
The amount is broken down to under-recoveries in generation rate for P6.41 billion, transmission rate at P607.38 million, system loss rate at P764.17 million and real property tax at P228.88 million.
Under the same filing, Meralco also applied for over-recovery for a total of P30.62 million equivalent to a total refund of P0.0009 per kWh refund for 12 months and will be lowered to P0.0007 per kWh for the succeeding 11 months.
The amount of refund will be due to over-recoveries on lifeline subsidy at P776.62 million, senior citizen discounts and subsidy at P2.5 million and local franchise tax at P27.34 million.
Meralco said under ERC rules, distribution utilities in Luzon are required to file their over or under recoveries by March 31.
However, the company requested for extension to file until April 30 citing the “voluminous documents that need to be prepared and validated.”
Meanwhile, ERC said NGCP issued notices of award for 36 ASPAs on April 18 but only 14 applications have been filed and are being scheduled for hearing.
NGCP earlier said AS is necessary for the company to manage power fluctuations to ensure the quality and reliability of power flowing through its system as if not managed properly, fluctuations can cause damage to sensitive equipment or lead to automatic load dropping and even pose a danger to the transmission system as a whole if severe.
ERC said NGCP is yet to pay filing fees on 16 other applications. Until payment is made, they cannot be considered as formally filed.
The ERC is also completing the pre-filing review of the remaining six ASPA applications.
“After pre-filing review, these remaining six applications will have to undergo publication and payment of filing fees before they can be formally filed by NGCP with and docketed for hearing by the ERC,” the regulatory body added.
Meanwhile, the ERC said it received applications for automatic cost adjustment and true-up mechanisms for the period 2020 to 2022 from 48 distribution utilities (DUs) in Luzon.
Once approved, the DUs can implement refunds or rate hikes due to over and under-recoveries, depending on their submitted reports and the ERC’s approvals.
Over and under-recoveries happen mainly due to the lag between payment to generation companies and billing to customers.
However, the ERC said 20 Luzon DUs have yet to submit their applications: Abra Electric Cooperative; Albay Electric Cooperative; First Bay Power Corp.; First Laguna Electric Cooperative; Ibaan Electric Corp.; Ilocos Norte Electric Cooperative; Isabela I Electric Cooperative; Isabela II Electric Cooperative; Kalinga-Apayao Electric Cooperative; Masbate Electric Cooperative; Nueva Ecija I Electric Cooperative; Nueva Vizcaya Electric Cooperative; Oriental Mindoro Electric Cooperative; Pangasinan I Electric Cooperative; Pampanga II Electric Cooperative; Quirino Electric Cooperative; San Fernando Electric Light and Power Co.; Ticao Island Electric Cooperative; Zambales I Electric Cooperative; and the Zambales II Electric Cooperative.
ERC said the DUs were reminded that failure to file their complete over and/or under-recovery application, along with the necessary supporting documents until May 30 may result in the imposition of administrative sanctions and penalties.
ERC added DUs’ failure to fulfill these requirements within the designated period may also result in suspension of their authority to impose pass-through charges to consumers to ensure accountability and serves as a safeguard against undue burdens on consumers.
