ERC Caused PhP20 B Worth of Refund to DUs’ Customers

ERC Caused PhP20 B Worth of Refund to DUs' Customers

The Energy Regulatory Commission (ERC), in its recent report to the House of Representatives, disclosed that it directed Distribution Utilities (DUs), both privately-owned and Electric Cooperatives, to return to their respective customers some PhP20 B worth of refund. The said total refund represents the amount of discount granted to customers, the Market Transaction Fee refund and over recoveries in the pass-through and Distribution Charge.

"Upon evaluation and verification of the reportorial requirements submitted, the Commission approved and directed the concerned Distribution Utilities to refund a total amount of PhP 20,145,890,691.21 to their respective customers. The big chunk of the amount represents the DUs' overcollection in their pass-through and Distribution charges", ERC Chairperson and CEO Agnes VST Devanadera said.

As a result of the ERC's directive, DUs' customers experienced the following rate reductions in CY 2020: (1) Luzon - Php 0.0025 to 0.9118/kWh; (2) Visayas - PhP 0.0028 to 1.3182/kWh; and (3) Mindanao - PhP 0.0151 to 0.9118/kWh. Meanwhile, for CY 2021, the rate reduction are as follows: (1) Luzon - PhP 0.0014 to 1.5064/kWh; (2) Visayas - PhP 0.0088 to 0.5719/kWh; and (3) PhP 0.0070 to 0.4348/kWh. For MERALCO (Manila Electric Co.) and CEPALCO (Cagayan Electric Power and Light Co.) the refund rates are PhP0.1528/kWh and PhP0.0268/kWh, respectively which represents overrecoveries in the Distribution Charges. For the Market Transaction Fee, the rate reduction is measly around PhP0.0029/kWh to PhP0.0039/kWh.

The ERC has established a systematic confirmation process of pass-through charges to ensure appropriate recovery of the various pass-through charges in an efficient manner, and that these periodic adjustments are implemented properly in accordance with the approved automatic cost adjustment mechanisms.

Under the Implementing Rules and Regulations of R.A. 9136 or the Electric Power Industry Reform Act (EPIRA), the ERC is authorized to require report or documents from the electric power industry participants. In line with the said mandate, the ERC adopted the Uniform Reportorial Requirement (URR) since 2010 which served as the monthly reportorial submission of the DUs. The said submission is being reviewed by the ERC to determine any over or under collection incurred by DUs by confirming the rates charged to their respective customers. Any over or under collection incurred by the DUs are either being refunded or collected upon the Commission's approval.

"The PhP20 Billion refund that the Commission approved is aimed to provide some rate relief, especially to those electricity consumers that were economically disadvantaged due to the limited operation or closure of some businesses. As the COVID-19 continues to persist, we urge the DUs to exercise empathy by allowing a more flexible form of payment of their customers' electricity bill, such as through staggered payment without penalties or interests. The ERC is finding ways to reduce the charges being billed by the DUs to their customers, such as the temporary suspension of some charges like the Bill Deposit Adjustment, Universal Charge and FIT-Allowance, when appropriate, to alleviate the poverty caused by this pandemic", ERC Chair Devanadera concluded.

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