Meralco to refund small users first

The Manila Electric Co. (Meralco) has filed a plan with the Energy Regulatory Commission (ERC) to start repaying customers an estimated P30.5 billion ($583.1 million) in excess billings.

The plan covers only small customers, or those consuming 100 kilowatt- hours (kwh) of electricity or less per month. Meralco said it would submit a separate proposal for larger users in about two weeks.

The firm said it would offer cash, or credit against future bills, to customers using 100 kwh of electricity or less per month.

The refund, proposed for June, would cover 1.3 million of the company’s customer base of just under four million. The total repayment has been estimated at P1.3 billion.

"We want to give an outright benefit to small consumers," said Meralco vice president Elpi Cuna.

Based on Meralco’s presentation, the refund pay-out will be implemented in phases, beginning with the smallest consumers who will receive a one-time full refund of P956.86.

The ERC, however, wants the power firm to include medium-bracket consumers, or those consuming 300 to 400 kwh per month, in the first phase of the refund scheme.

During a public hearing on the proposed refund and credit implementation process, ERC Chairman Manuel Sanchez said the coverage should be extended to those consuming more than 100 kwh.

"Many will be happy if the bracket ranges from 0-400 kwh. But of course we should consider Meralco’s capacity to pay," Sanchez said.

Under Meralco’s proposal for the first phase of the refund, customers will be advised of their refund amount and mechanics starting June 4. They will be given three days to claim the cash refund.

Those who opt not to claim their net cash refund and opt to apply the amount to their future bills instead, need not go to the branch during the designated schedule.

Ivanna de la Peña, Meralco’s head for utilities economics, said the refund due to customers will be based on their bill during the period they have been with Meralco from February 1994 to May 2003.

In a separate interview, Meralco president Jesus Francisco said the power firm already has an available balance of P1.4 billion that would be spent for Phase 1 of the refund scheme.

"It is part of what we had borrowed in our working capital and as we collect from our customers. We have ready cash for it," Francisco said, adding that the next phase of their refund scheme will involve those consuming 100 to 500 kwh of electricity per month.

The ERC is expected to issue next week its decision regarding Meralco’s proposed refund scheme.

In a Palace briefing yesterday, President Arroyo renewed her call to the ERC to facilitate the speedy reimbursement of the Meralco refund to small customers.

"We must do this at the soonest possible time. Justice has been served and we mustn’t let our people wait," she said. This was the same message she delivered on Labor Day.

"For other consumers, the ERC, I hope, will find the best formula to give back to our poor consumers the financial relief given them by the Supreme Court," Mrs. Arroyo added.

Presidential chief of staff Rigoberto Tiglao explained that when the President said "the soonest time possible," she would want the checks issued hopefully within this month.

"The President wouldn’t want any delays, she would want the checks issued for the refund. If the technical aspects are resolved, Meralco could very well issue the checks and put it in the bills, maybe in the next two weeks," he added.

Meralco, which last week announced a P2 billion-loss for 2002, has warned the refund would hurt its earnings and cash flow this year, but it would honor whatever refund arrangements were decided on.

The government owns about a quarter of the company and guarantees around a third of its debt. The second-largest shareholder is a joint venture of First Philippine Holdings and Union Fenosa of Spain, with 22.86 percent. — With Marichu Villanueva