Meralco readies rate cut plan on P4.3-B ‘unclaimed’ refund

Updated February 25, 2019, 12:41 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/02/24/meralco-readies-rate-cut-plan-on-p4-3-b-unclaimed-refund/

Power utility giant Manila Electric Company (Meralco) will be submitting to the Energy Regulation Commission (ERC) its rate reduction plan relative to the P4.3 billion worth of “unclaimed” refund.

Meralco’s refund was in keeping with the Supreme Court decision in 2003, rendering that income tax shall not be part of the rate base it will be passing on to consumers. At the time, the utility firm was mandated to refund up to P30 billion to its customers within a timeframe winding up in 2015.

But not all refund claimants turned up or been located, hence, there’s a fraction of the cost payback that had not been returned to customers – and that is the amount now mandated by the industry regulator to be utilized in bringing down Meralco rates.

The utility firm was thus granted at least a month leeway by the industry regulator to submit a rate reduction scheme that it will be enforcing relative to the unclaimed refund amount.

Meralco Vice President Lawrence S. Fernandez “right now, we were given 30 days by the Commission to submit a proposal.”

He qualified though that “there are a number of factors to consider” in the propounded cost reduction scheme – and these are currently still being studied by the power utility.

Accordingly, Meralco has been instructed “to deposit in a separate interest-bearing bank account the unclaimed amounts of the income tax refund – for transparency and easy monitoring purposes.”

Apart from the cost reduction using the unclaimed refund amount, the ERC has likewise ordered Meralco “to still continue with the implementation of the refund” to all qualified customers – through an extended timeframe that will lapse June 30 this year.

Further, Meralco was directed to submit within 10 days “an updated report on the gross and net amount of refund effected as of December 31, 2018.”

The ERC also directed the utility firm “to inform its customers immediately “to claim their refund. There is a required publication in newspaper of general circulation for four (4) weeks – and that shall commence immediately upon Meralco’s receipt of the February 4, 2019 ERC order.