Power consumers get refunds due to error in charges

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Power consumers get refunds due to error in charges

Topic |  

NOTE: This story was first published in The Bohol Chronicle’s Sunday print edition.

The Energy Regulatory Commission (ERC) has ordered electric companies to return a total of P1.2 billion worth of erroneous charges to consumers all over the Philippines as a result of the clamor from Bohol consumers.

This was reported by Gov. Art Yap to all Boholanos, based on the letter of ERC Chair and CEO Agnes Devanadera dated February 14, 2020.

“In Bohol alone, the amount to be returned to consumers reached more than P100 million and the amount will be credited back to the power bills of all Bol-anons,” according to Yap.


Of the more than P100 million due, around P80 million had already been returned to consumers of Bohol.

The scrutiny on the erroneous charges started from the vigilance of Bohol electricity consumers whom Yap represented before the ERC.

“We wish to thank you for your vigilance regarding the problem you had brought to our attention for it is not only the Bohol power consumers who benefited out of this but the entire Filipino people,” Devanadera told Yap.

Devanadera said the ERC had undertaken efforts since the time of Yap’s representation in July 2019, “in behalf of the Boholano power consumers, to seek guidance and intervention from the Commission, with respect to the inexplicably high electricity rates being charged to Bohol consumers for the month of May 2019 apparently due to high prices in the WESM (Wholesale Electricity Spot Market).”

On June 16 last year, the Chronicle came up with exclusive news about the high increase in electric bills that shocked consumers.

This prompted Yap to seek an audience before high officials of the Energy Regulatory Commission (ERC) in Manila the following month.


Devanadera acknowledged that the meeting “steered the discovery of the erroneous implementation by the Philippine Electricity Market Corporation-Market Operator (PEMC-MO) of the formula for the net settlement surplus (NSS) allocation which resulted to the wrongful allocation of the net settlement surplus across distribution utilities and all other trading participants reckoning from June 2018 to May 2019 amounting to around P1.9 Billion.”


“The erroneous implementation of the formula covering the subject period resulted to the computation of below NSS amount to be refunded to BLCI, Boheco I and Boheco II”, totaling P102,133,851.57, Devanadera explained.

On this, the ERC issued an order directing the PEMC/MO to enforce immediately, “the appropriate rate adjustments in the settlement amounts to all WESM participants which either resulted to refunds for some consumers, or payments by others”.

The reckoning point for the rate adjustments is the billing month of July 2019.


Bohol has three distribution utilities (DUs), the Bohol Light Company, Inc. (BLCI), Bohol Electric Cooperative (Boheco)-I and Boheco II which are WESM participants.

Of the P102,133,851.57 to be returned, BLCI gets P27,596,522.32; while Boheco-I gets P46,670,658.06; and Boheco-II gets P27,866,671.19.


The ERC also directed the PEMC/MO to accelerate the NSS adjustment collection from all non-DUs with the end goal of accelerating the NSS adjustment refund to DUs and ultimately, their respective consumers, according to Devanadera.

Devanadera also informed Governor Yap that as of November 2019, “the total refund of the NSS to the three Bohol DUs is almost fully implemented with a remaining balance of only around 3 percent”.

“The outstanding balance is due to the withholding taxes and the uncollected amounts from paying WESM participants who are still reconciling the amounts with their customers,” Devanadera explained.

The ERC set that the implementation dates of the NSS adjustments covering the period, June 2018 to May 2019, will be July to November 2019 billing period.

As to the status in the case of Boheco I, the billed amount was P46,670,658.06 in payable amount and P2,667,581.39 in VAT on Energy; and the total received amount was P45,243,478.44 in Energy and P2,463,054.13 in VAT on Energy. The outstanding balance, then, is 3.06 percent representing P1,427,179.62 in Energy and P204,527.26 in VAT on Energy.

For Boheco II, the billed amount was P27,866,671.19 in payable amount and P1,592,791.20 in VAT on Energy; and the total received amount was P27,014,513.81 in Energy and P1,470,669.64 in VAT on Energy. The outstanding balance, then, is 3.06 percent also representing P852,157.37 in Energy and P122,121.56 in VAT on Energy.

For BLCI, the billed amount was P27,596,522.32 in payable amount and P1,577,350.15 in VAT on Energy; and the total received amount was P26,752,626.03 in Energy and P1,456,412.48 in VAT on Energy. The outstanding balance, then, is 3.06 percent also representing P843,896.29 in Energy and P120,937.68 in VAT on Energy.

Devanadera’s letter to Yap was a way of updating the governor of the status of the efforts undertaken by the ERC in response to his representation in July last year.

It was actually through an order dated August 1, 2019, that the ERC directed the PEMC/MO to effect rate adjustments due to miscalculations.

The PEMC/MO had to make the necessary adjustments to the NSS allocations and corresponding settlement calculations for the June 2018 to May 2019 billing months.

The ERC explained in its earlier official statement that in reference to its findings on the inconsistencies in the share of generators and customers in the NSS allocations issued by the PEMC/MO.

“Upon validation, PEMC/MO reported to the ERC that the miscalculations were caused by its erroneous application of the formula in its software that is used to determine NSS allocations.  PEMC/MO has since applied the necessary corrections,” the ERC explained.

The PEMC was incorporated under the Securities and Exchange Commission (SEC) as a non-stock, non-profit corporation on November 18, 2003, through the initiative of the Department of Energy.

Its primary mandate is to manage, govern, and administer an efficient, competitive, transparent, and reliable market for the wholesale and purchase of electricity and ancillary services in the Philippines.

This is in accordance with Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001.

Section 30 of the EPIRA mandated the DOE to establish the WESM composed of the wholesale electricity spot market participants; and the market operator (MO) to implement the WESM in accordance with the WESM Rules.

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