ILOILO City – From P631 million that Panay Electric Company (PECO) was ordered to refund consumers beginning 2009, the amount left to be released is now down to P34 million, according to the sole power distributor in this city for the past 95 years. The alleged sluggish or non-refund of the amount was one of the issues raised against PECO’s application for the renewal of its franchise.
The Energy Regulatory Commission (ERC) ordered the refund.
The refund is expected to be completed by the second quarter of 2019, according to PECO corporate communications officer Mikel Afzelius.
“We are very transparent on that. We will show all the records,” Afzelius told Panay News.
The refund is indicated in the monthly bill of every PECO customer.
On Monday, the Senate’s Committee on Public Services “approved in principle” the franchise of MORE Electric and Power Corporation as new power distribution utility in Iloilo City to replace PECO.
PECO’s franchise is expiring in January 2019.
Committee chairperson Sen. Grace Poe said she received numerous complaints from consumers about PECO’s “bad service” and “penchant for overbilling customers.”
“You can see a P0.1595 per kilowatt hour reduction in the generation charge. We have been reducing the generation charge since 2009,” said Afzelius.
Councilor R Leone Gerochi filed a resolution calling for an audit and accounting of the refund.
On Nov. 16, 2009 ERC directed PECO to refund consumers P631 million representing the “over-recovery” of purchased power cost for the period February 1996 to July 2005 equivalent to P0.1595 per kilowatt hour.
It specifically directed PECO to refund the amount P0.1595 per kilowatt hour on each billing cycle of costumers until such time the full refund is achieved.
“There is a reason to believe that a substantial portion of the P631,325,961 has not been fully refunded to consumers, hence, it requires (ERC) auditing in light of the implementing expiration of the franchise to operate by PECO come Jan. 18, 2019,” read part of Gerochi’s resolution.
PECO applied for a franchise extension of 25 years. The application is still pending at the House of Representatives’ committee on legislative franchises.
In a separate official statement, PECO clarified that the amount in question was in the generation component of the electric bill which comes from the power supplier and not the distribution component where PECO derives its income.
Back in the 1990s power suppliers were mandated to either be cheaper or follow the rate of the National Power Corp. (now defunct).
PECO’s power supplier, Panay Power Corp. (PPC), was able to do so for a certain period of time, according to the city’s power distributor.
By year 2000, however, fuel prices soared, according to PECO, and it was difficult for PPC to match the then subsidized National Power Corp. rates.
Eventually, according to PECO, this then resulted in PPC generation charges higher than National Power Corp.’s rates.
As a rule, the generation charge is an automatic pass-on charge to consumers.
On Dec. 2, 2009 ERC directed PPC to refund the charges higher than National Power Corp.’s which was charged to PECO. PECO being the power distributor passed it on to consumers.
“The statement that a refund of P631.33 million has not been done is entirely false and simply shows that the person accusing PECO of such fallacy is simply not familiar or has no experience with the power distribution industry,” according to PECO./PN
