Manila: The Energy Regulatory Commission (ERC) has announced that the Manila Electric Company (Meralco) is facing under-recoveries in pass-through charges amounting to approximately PHP8.71 billion. This decision permits Meralco, a publicly-listed distribution utility, to recover these costs from its customers.

According to Philippines News Agency, Meralco also has PHP30.14 million in over-recoveries that must be refunded to its customers. The under-recoveries include costs related to generation, totaling PHP7.3 billion; transmission, at PHP615.93 million; system loss, amounting to PHP595.05 million; and real property tax, at PHP228.88 million. Conversely, the over-recoveries that Meralco must refund cover a lifeline subsidy worth PHP554,786, a senior citizen discount subsidy of PHP2.245 million, and a local franchise tax of PHP27.337 million. These refunds are to be processed over a period ranging from one month to 36 months.

The ERC's decision is part of Meralco's compliance filings under several case numbers, including ERC Case No. 2014-050 CF, 2017-060 CF, 2020-018 CF, and 2023-046 CF. Pass-through charges are collected by distribution utilities from consumers on behalf of other entities such as transmission facilities and government agencies.

ERC Chairperson and CEO Francis Saturnino Juan emphasized that pass-through charges are intended to be revenue-neutral for distribution utilities. These charges are not sources of profit but represent costs collected on behalf of generation companies, transmission providers, and government authorities. The ERC's verification process ensures that Meralco charges only allowable costs, safeguarding consumers from any excessive or unapproved expenses.