Meralco urged to speed up 2nd phase of refund

Energy Secretary Vincent S. Perez urged yesterday the Manila Electric Co. (Meralco) to speed up the submission of its application for the implementation of phase II of the refund scheme to allow other customer segments, particularly the medium-sized residential consumers to avail of the same benefit.

Perez made this call during a visit to Meralco Tutuban branch. He said the Department of Energy (DOE) is closely monitoring the implementation of the Supreme Court ruling directing the utility firm to refund its customers of overcharges made since 1994.

Meralco started last Friday the refund process to residential consumers using 100 kilowatt hour (kWh) or less in compliance with the May 12, 2003 order of the Energy Regulatory Commission (ERC) enjoining Meralco to start paying its customers in cash not later than June 6, 2003. Customers within this bracket, who were unable to claim their cash refund, will get it through credits to future bills.

"We are happy to see that Meralco has exerted all efforts and resources to carry out the refund process as efficiently and organized as possible. I commend Meralco for coming up with a mechanism, and even creating a task force that will specifically complete this task," Perez said.

The turnover of Meralco customers who were able to get their refund increased to 22,000, according to a Meralco official. An average of 1,200 customers per day are lining up in every Meralco branch to get a refund.

Meralco senior assistant vice president Ruth David said to facilitate phase I of the refund, the company has hired some 350 people on a contractual basis for at least two months.

David said some 600 Meralco employees have also volunteered at least two days of their free-time to help the company in the refund process.

She said the company’s branches in the provinces are busier than those in Metro Manila. "Our Calamba, Lucena and Bulacan branches have greater number of refund turnover because most of our small clients are in the provinces," she said.

In another development, Perez said electricity consumers will receive a new billing format this month.

Under the new format, Meralco’s electric bills will contain at least 14 different items, detailing the different services provided in the delivery of power to the end-user and the corresponding amount charged for each one. This is what we call the unbundling of rates as required under Republic Act 9136 or the Electric Power Industry Reform Act, the law restructuring the power industry.

Perez said the mandated unbundling of rates or the breaking down of the specific components of electricity bill will make the pricing of electricity more transparent and understandable to electricity consumers.

He added that the unbundling of electricity bills will eventually facilitate the structural unbundling of the electric power sector.

"Our electricity consumers will now be properly informed of what really makes up her household’s power bill and where does her family’s hard earned money go," Perez said.

The components under the unbundled power rate for residential users within the Meralco franchise area will include the following: generation charge, transmission charge, system loss charge, distribution charge, metering charge consisting of retail customer charge and metering system charge, supply charge, currency exchange rate adjustment (CERA), franchise tax for national and local taxes, lifeline rate subsidy, interclass subsidy, mandated rate reduction and universal charge consisting of missionary and environmental charges.

Prior to the unbundling of rates, the consumer’s electricity bill was composed of only four charges, namely the basic rate, currency adjustment, purchased power adjustment and Power Act Reduction.

Perez said the unbundling of rates will reflect the true costs of providing electricity service or how much of the total electric bill would go to generation, transmission, distribution and supply sectors.

"Prior to the unbundling of rates the costs were lumped such that there were doubts that the present billing system contains some hidden costs to the disadvantage of the consumers. The unbundling of rates will itemize each cost components to create transparency and correspondingly educate and empower our electricity consumers to better consumers," he said.