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LKI Press Statement 2021-004

February 12, 2021

Consumer group lauds Meralco initiative to ease burden of consumers during pandemic, calls for similar moves from other players in power industry

In a press statement released by Vic Dimagiba, the President   of Laban Konsyumer Inc. (LKI),  “I learned of the Meralco’s petition published in the major publications, and believe that it is laudable on the part of the distribution utility to come up with its own initiative that it will refund to customers. I commend this effort, and hope that provisional authority is issued to the distribution utility for the quick implementation for the welfare and benefit of consumer.

Dimagiba added the plea  comes on the heels of news this January that the MANILA Electric Co. (Meralco) has asked the Energy Regulatory Commission (ERC) for approval to refund P13.89 billion worth of over-recoveries based on its actual weighted average tariff charges (AWAT) from July 2015 to November 2020, according to a regulatory filing. This was their own initiative, a proactive stance taken by the DU to aid and assist customers through these hard times and we acknowledge the effort being made by the private sector.”

For background, it was pointed out that as published in the newspapers “In an order dated January 11, the ERC announced the schedule of hearing, which would be held in three separate events on Zoom starting February 16. Meralco applied for the approval of its final refund scheme last month, based on the calculation of its AWAT compared to the ERC’s approved interim average rate (IAR).”

The petition explained that “the DU proposed to true-up its AWAT as against its approved IAR for the period from July 2015 to November 2020. The difference between the AWAT and IAR will be the amount to be refunded to the customers, Meralco told the ERC in its application. Meralco proposed to make the refund over a two-year period or until the amount is fully refunded. The average refund to residential customers is Php 0.27 pkwh and average rate was placed at P0.1528 per kilowatt hour (kWh), and would be allocated among the different consumer classes.”

LKI President Atty. Vic Dimagiba said “we laud and commend the proactive program of Meralco… that is why we took it upon ourselves to intervene to support this initiative by Meralco. Any refund, especially done on voluntary basis, is welcome news for consumers, especially during this period of the challenging pandemic, where money is hard to come by for most poor Filipino consumers.”

Dimagiba pointed out “I also call out the renewable energy developers in our hope that they do the same, similar initiatives, and that the adjusted Feed-In Tariff (FIT ALL) that was awarded can be voided as a resolution. ERC and the RE developers should return and refund to customers and poor consumers the money that they took through high prices for FIT All and renewable energy developers.”

Dimagiba noticed that Meralco is the first petition of its kind filed voluntarily to offer a refund in recent years, and we hope that other players in the power and energy sector can soon follow suit. Similarly, in our pursuit for consumer welfare and the greater good for the average everyday Filipino customers… Our intervention compliments the group’s opposition to universal charges, FIT ALL and the FIT.”

        Finally “as explained in the publications, AWAT was based on Meralco’s distribution charges, which increased during the pandemic. During the pandemic, there were reduced operations and closures of business establishments. Residential consumption went up, and non-residential consumption decreased. So… the distribution rate of Meralco differed from the interim average rate. So, the difference, given the AWAT or rate of average tariff and the (IAR)…Meralco proposed to refund that to their customers. ERC was supposed to approve the rules for the performance-based regulation of privately-owned distribution utilities from July 2015 onwards but it was not able to do so. The reset of rules is supposed to approve a rate and incorporate an annual verification mechanism. Because there was no rate, Meralco’s AWAT filing became like an annual verification. They compared it against the approved IAR and proposed to implement the difference as a refund, a boon for consumers this start of 2021”

Dimagiba ended “we sincerely hope government, regulator and other DUs and ECs can follow this example for the benefit of consumers nationwide. This is a good first step for the new year 2021.”

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