Meralco wants to collect P7.9B in under-recoveries | Inquirer Business

Meralco wants to collect P7.9B in under-recoveries

MANILA  -Manila Electric Co. (Meralco), the Philippines’ largest power distributor, is seeking the green light to collect almost P8 billion from its customers and, if approved, this may slightly raise the electricity rates it charges.

Meralco intends to file before the Energy Regulatory Commission (ERC) a proposal to collect P7.9 billion in under-recoveries by April 30, said Jose Ronald Valles, the power firm’s first vice president and Regulatory Management Office head.

“We have estimated the average impact to our customers to be about 22 centavos per kilowatt-hour,” said Valles, noting they propose collect the amount over a 12-month period.


He added, “that would depend on the approval of the ERC with respect to the term if it will be approved for a shorter or longer period.”


Under the existing ERC rules, distribution utilities in Luzon should file their under-recovery claims by March 31.

Valles, however, said they requested an extension to file until end-April due “to voluminous documents that need to be prepared and validated.”

Distribution utilities such as Meralco are filing under-recovery claims with the regulatory agency to cover delayed payments to power firms.

The P7.9 billion in under-recoveries cover the following billing components: generation, transmission and system loss as well real property tax.

Mainly generation charges

The bulk of these charges are generation charges amounting to P6.4 billion. The generation charge accounts for more than half of the overall electricity rates paid by end users. Transmission charges followed with P607.4 million.

Meralco will also seek under-recoveries for real property taxes equivalent to P228.9 million.


Meralco is set to complete a refund of P21.8 billion to its customers by next month. The refund period started last July and would end in June this year.

The P21.8-billion rebate forms part of the P48.3 billion in refunds mandated by the ERC in separate orders from March 2021 to June 2023.

Earlier, the power distributor reported a net income of P8.07 billion in the first quarter of 2023, up by 26 percent, as the reopening of the economy sustains the increase in its energy sales.

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Its chair, Manuel Pangilinan, had expressed confidence that Meralco could achieve a double-digit growth by yearend as 2023 “is looking good.”

TAGS: generation charges, Meralco, transmission

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