The average P0.25 per kilowatt-hour (kWh) rate refund plea against Manila Electric Company (Meralco) was denied by the Court of Appeals (CA), following its dismissal of the petition lodged by the National Association of Electricity Consumers for Reforms (Nasecore) which questioned the basis of computation of the utility firm’s adjusted rates as anchored on the performance-based rate-setting (PBR) methodology.

The proposed refund could have accounted for the PBR-adjusted tariff of Meralco implemented from May until December 2009 billings. The average distribution charge of the utility firm was then pulled up to P1.2227 per kWh from P0.9798 per kWh.

The Meralco rate hike questioned before the CA was the last one prior to the P.02689 per kWh which was recently voluntarily suspended for implementation by the utility firm itself and correspondingly approved by the Energy Regulatory Commission.

In dismissing Nasecore’s petition, the 11th division of the appellate tribunal ruled that the ERC decision and order on Meralco’s PBR-based rates “were previously issued in accordance with existing rules and jurisprudence.” The court emphasized that “we cannot allow a rate rollback and refund simply on the ground that Meralco’s financial statements for 2003-2007 purportedly showed excessive profits. The ERC had already reviewed Meralco’s rate of return and found the petitioner’s contention without basis.”

Consumer advocacy group Nasecore has assailed that the regulatory body may have erred in its ruling on Meralco’s PBR tariff adjustment since it has not waited for the outcome of the directed audit on the utility firm’s books by the Commission of Audit (CoA) before handing down the decision on its rate application.

It also raised contention that the 15.5 percent weighted average cost of capital (WACC) as reference for Meralco’s adjusted tariffs may have been higher than the 12 percent cap set for utilities under return on rate base (RORB), which has been the accepted rate-setting methodology for utilities prior to the introduction of PBR in the deregulated power industry.