President Benigno S. Aquino III leads the ceremonial laying of the San Gabriel Power Plant Project time capsule in Brgy. Sta Rita, Batangas City January 14 that include Batangas Governor-turned actress Vilma Santos, among the many manifestations of continued economic growth in the Philippines. (MNS Photo)
MANILA (Mabuhay) – The Manila Electric Co. (Meralco) will have to refund its customers the P5 billion the power utility would be getting from the Power Sector Assets and Liabilities Management Corp (PSALM) and the National Power Corporation (NAPOCOR) in overpayments as a result of double-billing transmission line charges from 2006 to 2012.
The Court of Appeals Special Second Division, in a 20-page ruling, upheld the orders of the Energy Regulatory Commission on March 4 and July 1, 2013 that directed the Meralco to refund its 5.4 million customers.
The ERC ordered Meralco to refund its customers by way of automatic deductions to the computed monthly “Generation Rate” that the power utility will recover from PSALM and NAPOCOR.
Ruling on the case, the appellate court said it cannot grant PSALM’s request to stop the ERC from ordering the P5-billion refund.
“The court notes that the undisputed transmission charges are mere Meralco’s pass-through charges, In truth, it is the public that has been doubly charged,” said the CA.
Sought for comment, Meralco head legal William Pamintuan said the firm would follow the appelate court’s ruling.
“Meralco shall abide and comply with any executable order from the court or the ERC in this regard,” Pamintuan said.
Factual relevance
The CA said factual findings of regulatory agencies vested with recognized expertise like the ERC, should be given particular relevance, applicability and respect, especially when supported by substantial evidence.
The CA said it cannot supplant the ERC findings on the propriety of the method to be used in implementing its decision.
“Courts as a policy should not interfere in matters which are addressed to the sound discretion of activities coming under the special and technical training and knowledge of such agency,” the CA said.
In a 2010 decision, the industry regulator revealed that PSALM was “double charging… transmission line costs.”
Then in its contested March 4, 2013 decision, the ERC directed NAPOCOR to refund Meralco a total of P5.176 billion or P73.945 million per month until the refund is paid in full.
Meralco will then deduct the amounts from its monthly generation costs to reduce the generation charges against its customers’ bills.
Not feasible
The ERC originally ordered the Philippine Electricity Market Corp. (PEMC) to provide NAPOCOR and PSALM with segregated line rental amounts for the transition supply contract from the start of the Whole Sale Electricity Spot Market to compute the accurate amount of the refund.
However, the PEMC said that segregating the line rental (which bundles together line loss and line congestion) is not feasible.
The ERC eventually adopted a proposal from Meralco to deduct outright the 2.98 percent [line loss charge] from the NAPOCOR time-of-use [TOU] rates.
PSALM, however, contested Meralco’s method and was prompted to elevate the matter to the Court of Appeals by requesting for an injunction. (MNS)