Residential customers of Visayan Electric will be issued a one-time refund of P3.0002 per kWh for the bill they will receive from August 13 to September 12 due to over-recoveries of pass-through charges from January to June of this year. A residential customer who consumes an average of 200 kWh will be able to save up to P600 for this billing cycle.
Along with residential customers, other Visayan Electric customers will also get a refund, the amount of which will depend on what customer class they belong to.
The said refund, which will be deducted from a customer’s bill, is in compliance with the the Energy Regulatory Commission (ERC) Resolution No. 14, also known as A Resolution Adopting the Revised Rules Governing the Automatic Cost Adjustment and True-Up Mechanisms and Corresponding Confirmation Process for Distribution Utilities, which revises the rules on over and under recovery of pass-through charges collected by distribution utilities.
Over-recoveries, along with under-recoveries, are natural occurrences caused by the difference or time gap in the billing schedules and rates used by the power suppliers to bill Visayan Electric, and the billing schedules and rates used by Visayan Electric to bill its customers.
“ERC Resolution 14, which takes effect this year, has actually made the process of refund for over-recoveries easier. Which is why, when Visayan Electric breached the 10 percent threshold allowed by the commission, we immediately prepared for the implementation of the refund,” said Visayan Electric President and Chief Operating Officer, Engr. Raul Lucero.
The said threshold that was set by ERC mandates distribution utilities to issue a refund once over-recoveries of pass through charges go beyond 10 percent of the actual cost of electricity purchased by the distribution utility.
The downtrend in the cost of electricity starting January until June this year resulted in over-recoveries in the amount collected by Visayan Electric for the 6-month period.
In 2022, the uptrend in the cost of electricity resulted in under-recoveries in the amount collected by Visayan Electric. However, ERC Resolution No. 14 was not in effect yet at that time, thus, the old rule for over and under recoveries was applied wherein the electric utility had to apply for ERC’s approval to collect under-recoveries.
Under ERC Resolution 14, under-recoveries can also be collected once the 10 percent threshold has been breached but the electric utility cannot collect more than 30 centavos per month.
Along with residential customers, other Visayan Electric customers will also get a refund, the amount of which will depend on what customer class they belong to.
At least 65 percent of an electric utility customer’s bill is composed of pass-through charges for generation and transmission. Almost 20 percent goes to the distribution utility while the remaining 15 percent is composed of government charges. Pass-through charges are subject to constant fluctuations due to various factors such as the price of coal, global economic conditions, and other variables. Visayan Electric’s distribution rate has remained unchanged at P1.5992/kWh since 2014.
The refund on the over-recovered pass-through charges helps maintain transparency and fairness in billing practices and ensures that customers are only paying for the actual power supply costs incurred by Visayan Electric.
Visayan Electric is the second largest electric utility in the Philippines. It serves the cities of Cebu, Mandaue, Talisay, Naga and four municipalities of the greater part of Metro Cebu — Liloan, Consolacion, Minglanilla and San Fernando.
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