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P10B refund to Meralco customers looms

ERC finalizing order on PSALM’s overcharging


02:18 AM March 18th, 2013

By: Amy R. Remo, March 18th, 2013 02:18 AM

Customers of Manila Electric Co., the country’s biggest power distributor, can soon expect refunds from the P10 billion worth of transmission line costs that were overcharged by the state-

run Power Sector Assets and Liabilities Management Corp. (PSALM) starting in 2006.

Francis Saturnino Juan, executive director of the Energy Regulatory Commission, told reporters that the hearings on the case have been completed last December and that a decision could be issued in a matter of weeks.

However, Juan declined to disclose whether Meralco’s more than five million customers would be refunded the whole P10 billion in double-charged transmission costs, as computed by the distribution utility, or whether it would be lower or higher than this amount.

“There will definitely be a refund because in the main decision of the Commission, it already found that there is [double charging]. The question now is how much should be refunded, and by who, to whom and how will it be flowed through the end consumers who actually paid these amounts,” Juan explained.

There is a draft of the decision that will be finalized once all the commissioners have signed it.

Meralco earlier complained about being double charged because of the 2.98-percent transmission loss recovery (or line losses) included in the transition supply contract (TSC) between National Power Corp. and the distribution utility, and in the line rental charges, which comprised congestion cost and line losses, being collected by Philippine Electricity Market Corp. since the wholesale electricity spot market (WESM) started operating in June 2006.

In a decision dated March 10, 2010, ERC found a “double charging in transmission line costs.” But compliance by various parties involved was incomplete as some of the data needed for the computation were no longer available. Since the ERC has ruled that there was indeed “overcharging” by PSALM, the point of contention now was the amount that was overcharged.

Meralco earlier said the overcharging amounted to P9.1 billion, but later raised the figure to roughly P10 billion after further computations.

PSALM earlier contested the amount, stressing that the overcharging should be lower than P9.1 billion or the initial amount issued by Meralco. The state agency, however, never gave its own computations, according to Juan.

In a separate interview, PSALM president and CEO Emmanuel R. Ledesma Jr. commented: “PSALM has submitted its memorandum to ERC hoping that the March 10, 2010, decision of the Commission be implemented as worded.”

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