Meralco can’t collect higher rates after TRO lapses

MANILA, Philippines - The Manila Electric Co. (Meralco) cannot automatically collect higher rates to reflect the sharp rise in December generation charge even after a Supreme Court temporary restraining order (TRO) on the planned adjustment lapses on April 22 and gets no extension.

Energy Secretary Jericho Petilla and Meralco head of utility economics Larry Fernandez made this clear as the 60-day TRO on the charging of higher rates in December 2013 and last January is set to expire on Tuesday.

“If the TRO is lifted, the regulated price will be imposed and not the original P4.15 per kilowatt-hour increase,” Petilla said.

“No we will not (automatically charge higher rates). Similar to what we did for the January rates, we will need to get the recalculated rates and we need to file a petition with the Energy Regulatory Commission (ERC),” Fernandez said.

Ruling on petitions filed by militant and consumer groups, the SC stopped Meralco from collecting the record high generation charge of P9.10 per kwh through a TRO issued on Dec. 23. It extended the TRO for another 60 days to April 22.

The ERC, after investigating the situation that led to the spike in electricity prices in December 2013 and January 2014, ordered the Philippine Electricity Market Corp. (PEMC) to recalculate the rates for the period. The PEMC is the operator of the Wholesale Electricity Spot Market Corp. (WESM), the country’s trading floor for electricity.

The regulator also ordered PEMC to void the WESM rates during those months, which served as basis for Meralco’s December 2013 and January 2014 generation charge. 

The spike in generation charge was largely blamed on the simultaneous and unscheduled shutdown of several power plants. Exacerbating the problem was the scheduled maintenance shutdown of the Malampaya natural gas plant in Palawan.

Refund

Meanwhile, Meralco was urged yesterday to refund more than P2 billion in electric meter deposits starting this month instead of next month.

Meralco has announced that it would start making refunds in May.

Rep. Arnel Ty of party-list group Liquefied Petroleum Gas Marketers Association said the distributor could credit part of the P2.138-billion deposits to this month’s bills of its more than five million customers.

“Meralco should begin the automatic crediting of all meter deposit refunds to customer bills this April. It is bad enough that it has taken Meralco more than five years to comply with the mandatory return of all meter deposits plus accrued interest,” he said.

This would cushion the impact on customers of higher electricity charges this month, he said.

He noted that Meralco has announced that it would increase its rate by 89 centavos per kwh in its April billings, mainly on account of costlier generation charges in March.

“Meralco was supposed to refund some P3.098-billion worth of meter deposits plus interest starting way back in 2008. However, the company has so far repaid only P960 million, leaving some P2.138 billion in meter deposits un-reimbursed,” Ty said.

The meter deposit was the amount paid by applicants for Meralco service. It served as guarantee for the loss of, or damage to, the meter installed by the company.

The law has freed customers from paying the deposit and mandated Meralco to refund deposits previously paid.

Customers who applied for service and paid the meter deposit from 1987 to 2004 (for residential users) and from 1987 to 2006 (for non-residential users) are entitled to refunds.

Ty said the meter deposit refund is on top of some P1.5 billion in residual repayments that Meralco still owes its customers due to previous overcharges.

Ty has filed Resolution 882 urging the House committee on energy to inquire into Meralco’s failure to fully comply with the Nov. 15, 2003 Supreme Court ruling for the company to refund overbillings originally worth some P30.2 billion.

The overcharges stemmed from prior years’ corporate income taxes, the cost of which was wrongfully passed on by Meralco to its customers, he said.