Friday, September 05, 2008 Meralco dismayed with ERC ruling
POWER retailer Manila Electric Company (Meralco) is now studying other options to recover the P2.7 billion, which the Energy Regulatory Commission (ERC) prevented them from claiming as part of their 10 applications for adjustment in generation and system loss charges.
"While we welcome the additional collection, we are disappointed that the ERC disallowed the recovery of P2.7 billion," said Meralco vice president for corporate communications Elpi Cuna.
Cuna said: "The disallowance (to collect the P2.7 billion) will hurt us since we have already advanced payments for these costs. Our lawyers are closely studying the ERC decision."
Meralco will start collecting the 2.41 centavos this month, Cuna said, adding "we have long waited for this decision since these are for costs we already advanced and paid our power suppliers way back in 2006 and 2007."
Last January, the ERC released an order dated December 10, 2007 allowing Meralco's partial recovery of P8.8 billion.
In accordance with the order, Meralco has been collecting 16.62 centavos per kwh (kilowatt-hour) under a separate item in the bill labeled "Previous Month's Adjustment on Generation Cost" starting February 2008.
The recently released decision dated June 4, 2008 of the ERC resolving the 10 applications also specified that the additional 2.41 centavos be separately shown in the bill using the phrase "Previous Month's Adjustment on Generation Cost."
The additional 2.41 centavos will simply be added to the 16.62 centavos, bringing the total collection under the item "Previous Month's Adjustment on Generation Cost" to 19.03 centavos.
According to Cuna, the impact of the 2.41 centavos on the electricity bills would be very minimal.
He said customer consuming 100 kwh will only receive an increase in his monthly bill of P2.41, while residential customers consuming around 200 kwh will get an increase of not less than P5.
Aside from the 10 applications covered by the ERC decision, Meralco has pending petitions with the commission seeking approval to collect advances it has made in the pass-on of transmission costs and in the implementation of cross subsidies.
"We are hopeful that the commission will also act on our other petitions as these have also significantly affected our cash flow," admitted Cuna.
The ERC in its order released last Wednesday the approved petition for under-recoveries of Meralco for its generation and system loss charges covering the periods August 2006 to May 2007.
It has reduced Meralco's under-recoveries to P9.1 billion from the original computation of P21.375 billion.
Meanwhile, the ERC ordered Meralco to allow the Commission on Audit (COA) to examine its financial records.
In a letter sent to Meralco president Jesus Francisco dated September 3, ERC chairperson Zenaida Ducut said COA has already indicated the dates and pertinent details of the audit, which it will undertake on the power firm's financial statement.
Ducut said audit will cover the calendar year 2004 to 2007.
"We direct you to open your books, records and accounts to the COA team and provide the necessary office space and other facilities that it may need in the conduct of its rate audit," she said.
She gave the power firm 10 days to coordinate with COA for the immediate implementation of the audit. (MSN/Sunnex)
