THE former commissioner of the Energy Regulatory Commission (ERC) declared that power distributor Manila Electric Company (Meralco) should initiate refunds to their customers a total of P150 billion and lower power rates after regulators re-compute its weighted average cost of capital (WACC).
According to Alfredo Non, a former commissioner, noted that based on their computation it said that the Meralco customers that were entitled to refunds: P2,700 per month for those consuming 200 kwh monthly; P9,500 per month for those consuming 300 kwh monthly; P15,500 per month for those consuming 400 kwh monthly; and P51,000 per month for those consuming 1,000 kwh or more monthly.
"So P150 billion should be returned to us. I have already submitted my proposed computation to ERC,” Non said.
He said his computation also included new rates that Meralco should charge its customers after the refund is completed.
“Now after the refund is paid, the monthly bill will change,” said Non.
He also said that these adjustments should be implemented: Rate reduction of P22 per month for those consuming 200 kwh monthly; P79 per month for those consuming 300 kwh monthly; P129 per month for those consuming 400 kwh monthly; and P428 per month for those consuming 1,000 kwh or more monthly
“That's my initial computation, depending on how the appreciation of the ERC is,” said Non.
Likewise, Non said that the refund, is mainly due to the fact that Meralco is charging P1.47 per kwh although the provisional authority rate was just P1.38 per kwh.
“Since 2012, there have been no complete rates.,” said Non.
“The rates should be reset every four years so that means Meralco does not have a final rate,” he said.
He said the basis of Meralco for its rate is the provisional P1.38 per kwh which is “only temporary”but is not being followed.
“From 2012 until now, Meralco’s average billing rate to us is P1.47 per kwh. So, there is already an overbilling of P0.09 per kwh,” said Non.
According to Non, there is a an error in the provisional rate. He said it should only be P1.05 or P1.06 per kwh.
“There are two issues here,” Non said. “The wrong computation from 2012 to 2015 and the WACC,” he said.
“These are the two things that will change our rate: If the error is corrected and the decrease in interest rates,” said Non.
WACC is one of the “building blocks” for computing power costs under the government’s rate-setting methodology called the Performance-Based Regulation (PBR).
Earlier, Laguna Rep. Dan Fernandez said the unadjusted WACC is the key reason for consistently high power rates. Also, he said the current WACC of Meralco was computed to allow the utility to cope with the Asian financial crisis then but this remained unchanged even after the crisis, allowing the utility to collect higher rates.
Non said the numbers he listed were his own calculations submitted to the ERC.
“I started doing my own calculations after my retirement in 2018. After I did the calculations, I submitted it to the ERC but of course it’s now up to them already,” said Non.
Sen. Sherwin Gatchalian had urged ERC to expedite the reset of the WACC, saying the commission should examine components in determining it in Meralco’s case, which is 14.97 percent since 2015.
“ERC should make sure that charges passed on to consumers by distribution utilities to consumers are fair and correct,” the senator said in Filipino.
“Consumers should not pay more than what is proper,” he said.
According to the ERC timeframe, the results of the WACC review and reset for distribution utilities, mainly Meralco, should be finalized by March 2024.
But Gatchalian said the original date set by ERC to complete the review for Meralco has already been delayed by more than a year.
Meralco had said all rates had been approved by the ERC and it adheres to orders to adjust costs from the commission.
