Meralco to refund over P13B in 2 years

By Mayvelin U. Caraballo, TMT February 20, 2021
https://www.manilatimes.net/2021/02/20/business/business-top/meralco-to-refund-over-p13b-in-2-years/842997/

The Energy Regulatory Commission (ERC) has granted the Manila Electric Co.’s (Meralco) petition filed late last year petition to refund P13.88 billion to its customers within two years.

In an order on Friday, the power regulator said the amount was equivalent to P0.1528 per kilowatt-hour (kWh). Meralco must return the amount within that period or until it is fully refunded, it added.

ERC Chairman and Chief Executive Officer Agnes Devanadera said her agency’s move would allow the company’s customers “to immediately enjoy the benefits of the proposed refund and provide immediate rate relief, especially during [the coronavirus] pandemic.”

The refund covers the difference between the actual weighted average tariff (AWAT) of its distribution charge of P1.4414/kWh and Meralco’s ERC-approved distribution rate of P1.3810/kWh.

The ERC order limits the provisional approval only to refunding the amount applied by Meralco.

“Except for authorizing the refund as applied, all other allegations, assumptions and computations made in the instant application are still subject to the ERC’s extensive evaluation and pertinent rules on the matter,” it said.

The commission also directed Meralco to reflect the refund as a separate line item in its bills of customers during the refund period.

“We hope that the reduction in rate could help our consumers cope with the still-ongoing pandemic,” Devanadera said.

Joe Zaldarriaga, Meralco vice president for corporate communications, said that “with the petition we filed, Meralco hopes to put the PBR (performance-based regulation) mechanism back on track, that we appreciate the provisional approval and that we will follow the order, as this will provide much needed relief to our customers.”



Two qualified bidders

The order comes as Meralco announced that two out of six firms were qualified to participate in the competitive selection process (CSP) to supply the power giant with 1,800 megawatts of electricity.

Meralco’s Third-Party Bids and Awards Committee identified them as Excellent Energy Resources Inc. (EERI), which offers a levelized cost of electricity (LCOE) of P4.1462/kWh, and Masinloc Power Partners Co. Ltd. (MPPCL), which offered P4.2605/kWh. Both are much lower than the LCOE reserve price of P5.2559/kWh.

EERI plans to supply 1,200 MW from a natural gas-fired power plant while MPPCL offers 600 MW from a coal-fired facility.

The other four were Mariveles Power Generation Corp., Atimonan One Energy Inc., GNPower Dinginin Ltd. Co. and St. Raphael Power Generation Corp. They had offered LCOE of P4.3321/kWh, P4.6338/kWh, P5.2500/kWh and P5.4426/kWh, respectively.

Energy Secretary Alfonso Cusi welcomed the outcome, calling it “very encouraging.”
“It will definitely bring down rates, which would be to the benefit of our consumers” Cusi said in a message to reporters.

“The CSP is a work in progress, which aims to help us achieve electricity tariff levels that are affordable and competitive enough to attract both foreign and local investments to do business here in the Philippines,” he added.