The total cost recoveries yet to be passed on by utility giant Manila Electric Company (Meralco) to its customers hovered at P6.93 billion; and its various petitions are still pending for resolution by the Energy Regulatory Commission.

Documents culled from the utility firm showed the cost recoveries as follows: generation charges for P2.701 billion; updated transmission charge recovery for P1.025 billion; system loss charge for P1.295 billion; inter-class subsidy for P863.9 million; and lifeline subsidy for P1.053 billion.

To mitigate cost impact on consumers, it is expected that the ERC will not rule one-time on all petitions.

For the generation charge recovery, Meralco noted that its motion for reconsideration is still pending with the regulator. The costs account for purchased power from the Wholesale Electricity Spot Market (WESM) that the utility firm was not able to recoup when the automatic pass on of generation charges was suspended over the periods 2006 to 2007.

“That refers to the portion of Meralco’s WESM purchases during the period of AGRA (Automatic Generation Rate Adjustment) suspension that was disallowed by the ERC. It’s the subject of MR that we filed,” the utility firm explained.

On the system loss charge, Meralco noted that ERC directed it “to re-compute claims after confirmation of transmission cost to be used for the affected period.”

As far as cost recovery for transmission charges, Meralco’s recalculation pared it down to P1.025 billion as of end-April 2009, from its original filing of P5.553 billion.

Documents showed that while the company has been incurring under-recoveries from June 2003 to March 2008 totaling P7.42 billion; this was partly offset with over-recoveries amounting to P6.396 billion incurred from April 2008 to April 2009.

Meralco explained that technically, its case filing for P5.5 billion transmission charge under-recoveries can no longer be amended, but its latest filing advanced proposal that it be offset with the over-recoveries made.

“This will enable ERC to rule on the pending case on transmission charge under-recoveries, simultaneous with a ruling on the over-recoveries,” the company noted.

For the remaining cost recoveries for transmission, the estimated impact to consumers would be P0.03 per kilowatt hour (kWh) once approved by the Commission.

The filings for inter-class subsidy and lifeline subsidy recoveries are still pending for ERC decision. Public hearings have already been concluded for both petitions.

Meralco is eyeing that when all these cost recoveries are finally resolved and passed on to consumers, it will help shore up the company’s profitability.