‘We’re complying with refund order’

Panay Electric Company (PECO), Iloilo City’s sole power distributor, clarified that it had already returned around 95 percent of the total amount it needed to refund.

Luis Miguel Cacho, PECO president and chief executive officer, said the “statement that a refund of P631.33 million has not been done is entirely false.”

According to him, the amount has been “substantially reduced to only P34 million.”

Cacho assured that the remaining amount will be refunded to their customers by the second quarter of 2019.

The Energy Regulatory Commission (ERC) also denied that it castigated PECO for failing to comply with a refund order.

Cacho explained that the refundable amount has nothing to do with PECO’s distribution charges.

He said it “was first and foremost an issue in the generation component of the bill which comes from our power supplier, Panay Power Corp (PPC), and not the distribution component where PECO derives its income.”

PECO said in 1990, power suppliers were mandated to implement power rates that were equal to or lower than that of the now defunct National Power Corp. (Napocor).

In 2000, fuel prices went up. The increase gave PPC a hard time to match the subsidized Napocor power rates.

“Also, due to the subsidizing of fuel, NPC accumulated a huge debt which led to their shutdown and resulted in generation prices that was supplying PECO to surpass NPC’s rates,” PECO said.

In December 2000, Napocor’s debts reached P900 billion, which led PPC to have PECO raise rates higher than Napocor’s.

Generation charges, based on ERC rules, can be automatically passed on to costumers. Distribution charges, on the other hand, need the approval of ERC before it can be collected from customers.

This prompted the ERC to order PPC to refund the raised fuel rates charged to PECO.

“This resulted in PECO having a generation rate reduction of P0.1595/kwh, as reflected as Previous Years Adjustment in the Generation Component, which can be found in its electric bill given to its valued consumers,” Cacho said.

“The ERC is also fully aware of this matter and has not sanctioned PECO for any irregularities due to this case,” he added.

SOURCE: Iloilo Metropolitan Times

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