PSALM disputes Meralco overcharging claim

State-run Power Sector Assets and Liabilities Management Corp. (PSALM) has disputed the P9.1 billion worth of transmission line costs it had allegedly overcharged customers of power distributor Manila Electric Co. (Meralco), noting that this was “unfounded.”

In a statement issued Tuesday, PSALM president and chief executive Emmanuel R. Ledesma Jr. explained that the alleged double charging in transmission line costs arose out of the simultaneous implementation of the transition supply contract (TSC) between National Power Corp. (Napocor) and Meralco and of the price determination methodology (PDM) in the wholesale electricity spot market.

“PSALM continues to be bound by the TSC and the PDM as both remain valid until today. PSALM cannot deviate from either until an effective segregation mechanism from Philippine Electricity Market Corp. (PEMC) is approved by the Energy Regulatory Commission (ERC),” Ledesma said.

“The P9.1 billion that PSALM allegedly overcharged Meralco’s customers cited in a news report is unfounded and, at best, premature considering that the final amount is yet to be determined after the ERC approves the implementation of a refund or collection scheme upon compliance of the parties with the directives of the regulatory body,” Ledesma said.

Meralco earlier complained of being double charged because of the 2.98-percent transmission loss recovery (or line losses) included the TSC and the line rental charges, which are made up of the congestion cost and line losses, being collected by PEMC since WESM started operating in June 2006.

The ERC, in a decision dated March 10, 2010, already 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.

For instance, PEMC earlier commented that “the segregation of line rentals into transmission loss and congestion cost since the start of the commercial operations of the WESM would entail reconstruction of hourly data for the last five years and would cause considerable strain in its resources.”

Meralco suggested an outright refund of the 2.98-percent transmission loss recovery factor included in the TSC. This proposal, however, was countered by PSALM, which insisted that the computation for the refund should be based on actual segregated line rentals.

Meralco has submitted a summary of TSC line loss computation and breakdown of TSC from July 2006 to May 2012 and supporting invoices and official receipts covering the period July 2006 to May 2012.

“PSALM is reviewing and evaluating the voluminous documents submitted by Meralco in its compliance to ensure the accuracy of the computation of the refund of line rental adjustments to consumers. PSALM will proceed with the refund as soon as all the parties faithfully comply with the ERC directives in its decision dated (March) 10, 2010,” Ledesma concluded.

ERC executive director Francis Saturnino Juan said the P9.1 billion is not yet a final figure and will have to be deliberated by the commission. The P9.1 billion represented the amount of refund arrived at by Meralco based on its suggested computation.

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