A MODIFIED version of the decision regarding the lapse of Manila Electric Company’s (Meralco) fifth regulatory period, which will have a bearing on refunds to customers, will be released at the soonest possible time, reinstated Energy Regulatory Commission (ERC) chair and CEO Monalisa Dimalanta told reporters on Monday.
In an online press conference, Dimalanta said: “Before the end of my suspension period, there was a commission meeting regarding Meralco’s fifth regulatory period because it was brought up in the Senate… The commission revisited the issues and adopted some modifications on our previous decision to [declare] the period has lapsed. However, I’m not yet sure what these [modifications] are.”
In August, the Ombudsman ordered Dimalanta suspended for six months following a complaint from the National Association of Electricity Consumers for Reforms Inc. for her alleged inaction and “failure to resolve” various petitions and complaints.
However, the anti-graft body found no grounds to justify a full preventive suspension.
Before her suspension, Dimalanta said in a public forum that the ERC, voting 3-2, decided Meralco’s 5th regulatory period has lapsed, but the decision was not implemented.
A lapsed period means electricity consumers pay charges that are no longer reflective of the current cost of the service, while awaiting the approval of a new rate.
As soon as a new rate is approved, the ERC may order Meralco to implement adjustments, such as a refund scheme, to account for discrepancies during the lapsed period.
Meralco has estimated P16 billion in refunds to consumers once the ERC resolves its fifth regulatory rate reset.
The rate reset process is a “forward-looking” exercise that requires Meralco to submit a forecast expenditures and proposed projects in a five-year regulatory period for the ERC to review and adjust power rates.
Meralco senior vice-president and regulatory management head Jose Ronald Valles said the P16-billion refund was computed from the average weighted actual price over the approved maximum average price set by the ERC, which Meralco is authorized to charge for its services.
Under the Electric Power Industry Reform Act of 2001, the ERC is mandated to establish and enforce a methodology for setting transmission and distribution wheeling rates for a distribution utility such as Meralco, which is subject to a performance-based regulation in which they are required to undergo a rate reset process prior to the start of the next regulatory year.
In March 2022, Meralco filed an application for a fifth regulatory period effective July 1, 2022 to June 30, 2026.
Valles said Meralco is awaiting the ERC’s official decision to start preparations for the next period of rate reset, or the sixth regulation period, starting July 2026.
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