The ERC’s approval will pave the way for the completion of Meralco’s P30-billion refund as mandated by the Supreme Court decision in 2003 as compensation for the company’s alleged overcharging.
ERC Chairman Rodolfo Albano said the commission unanimously approved Meralco’s application including its petition to move the refund schedule for Phase 4-A to July and Phase 4-B to October.
Albano said the ERC decided that terminated services will also be subject to refund.
This refers to service in which contracts were terminated on or before April 30, 2003.
Phase 4-A is for small commercial/industrial customers and flat streetlights including government hospitals and metered streetlights (GHMS) with contracted demand lower than 40 kilowatts (kW).
The refund period for Phase 4-A will run from July to December 2006.
Terminated services of Phase 4-A will run from May 2006 to November 2006.
Phase 4-B, on the other hand, is for medium, large, very large and extra-large commercial and industrial customers including GHMS with contracted demand of 40 kW or higher.
For Phase 4-B, the refund period will start from October to December 2010. Refunds for terminated services will start from January 2008 to June 2008.
Meralco asked for a rescheduling of its refund program to give it some flexibility in its cash flow.
Albano said customers will be issued postdated checks, fixed credit to bills or cash.
He added that Meralco was also told to reclassify all government accounts falling under Phase IV-B to Phase IV-A as this refund will be used for public purposes.
At the same time, Meralco is required to publish in a newspaper the names of customers with terminated accounts who have not yet claimed their refunds under Phase 1 to 3.
Moreover, the refundable amount will be subject to withholding tax from the Bureau of Internal Revenue.
The BIR previously ordered Meralco, through Revenue Regulation Number 8-2005, to withhold a 25-percent creditable income tax on refunds due industrial and commercial customers with active accounts and 32 percent on refunds for customers with terminated accounts.