CUSTOMERS of the Manila Electric Co. (Meralco) could get as much as P16 billion in refund once the Energy Regulatory Commission (ERC) resolves the company’s 5th regulatory period (5RP) rate reset.
Jose Ronald Valles, Meralco senior vice president and head of regulatory management, said on the sidelines of a briefing in Pasig City last Monday there are indications the ERC will just consider the 5RP as a lapsed period.
Meralco’s 5RP covers the years 2022 to 2026.
Valles said once the 5RP is declared lapsed period, ERC could then confirm Meralco’s rate for the period is P1.3522 per kilowatt hour (kWh) instead of P1.57 per kWh that Meralco has applied for.
He said ERC will then direct Meralco to refund the average weighted actual tariff (AWAT) in excess of P1.3522 per kWh covering the entire 5RP.
A rate reset is conducted by the ERC to periodically review and adjust distribution rates charged by utilities like Meralco to ensure that rates reflect the actual costs of delivering electricity to factor in inflation, operational expenses and the weighted average cost of capital.
Valles added due to Meralco’s sales mix, especially on times when residential customers consume more electricity than other customer classes, its AWAT exceeds the current final distribution rate of P1.3522 per kWh.
“We estimate the amount of refund to be at least P16 billion for the four-year period of 5RP. Note that the current rate of Meralco is lower than the P1.3810 previously authorized by ERC. This rate was reduced by almost 3 centavos per kWh after a thorough review by ERC,” Valles said.
He said if the ERC has approved Meralco’s proposed P1.57 per kWh rate for 5RP during a reset proceeding, there would be no or very minimal AWAT refund.
Meralco’s next rate reset for the sixth regulatory period (6RP) is set to be effective by July 2026.
Valles said Meralco is still awaiting for official orders from the ERC in terms of the rate reset proceedings.
“…We don’t want the 6RP to be delayed again so we want to prepare this early because we have a full 21 month period under the rules to prepare for the reset,” Valles said.
