Manila, May 10, 2003 -- The Manila Electric Co. (Meralco) has filed a plan 
with the Energy Regulatory Commission (ERC) to start repaying customers an 
estimated P30.5 billion ($583.1 million) in excess billings.

The plan covers only small customers, or those consuming 100 kilowatt- 
hours (kwh) of electricity or less per month. Meralco said it would submit 
a separate proposal for larger users in about two weeks.

The firm said it would offer cash, or credit against future bills, to 
customers using 100 kwh of electricity or less per month.

The refund, proposed for June, would cover 1.3 million of the company’s 
customer base of just under four million. The total repayment has been 
estimated at P1.3 billion.

"We want to give an outright benefit to small consumers," said Meralco vice 
president Elpi Cuna.

Based on Meralco’s presentation, the refund pay-out will be implemented in 
phases, beginning with the smallest consumers who will receive a one-time 
full refund of P956.86.

The ERC, however, wants the power firm to include medium-bracket consumers, 
or those consuming 300 to 400 kwh per month, in the first phase of the 
refund scheme.

During a public hearing on the proposed refund and credit implementation 
process, ERC Chairman Manuel Sanchez said the coverage should be extended 
to those consuming more than 100 kwh.

"Many will be happy if the bracket ranges from 0-400 kwh. But of course we 
should consider Meralco’s capacity to pay," Sanchez said.

Under Meralco’s proposal for the first phase of the refund, customers will 
be advised of their refund amount and mechanics starting June 4. They will 
be given three days to claim the cash refund.

Those who opt not to claim their net cash refund and opt to apply the 
amount to their future bills instead, need not go to the branch during the 
designated schedule.

Ivanna de la Peńa, Meralco’s head for utilities economics, said the refund 
due to customers will be based on their bill during the period they have 
been with Meralco from February 1994 to May 2003.

In a separate interview, Meralco president Jesus Francisco said the power 
firm already has an available balance of P1.4 billion that would be spent 
for Phase 1 of the refund scheme.

"It is part of what we had borrowed in our working capital and as we 
collect from our customers. We have ready cash for it," Francisco said, 
adding that the next phase of their refund scheme will involve those 
consuming 100 to 500 kwh of electricity per month.

The ERC is expected to issue next week its decision regarding Meralco’s 
proposed refund scheme.

In a Palace briefing yesterday, President Arroyo renewed her call to the 
ERC to facilitate the speedy reimbursement of the Meralco refund to small 

"We must do this at the soonest possible time. Justice has been served and 
we mustn’t let our people wait," she said. This was the same message she 
delivered on Labor Day.

"For other consumers, the ERC, I hope, will find the best formula to give 
back to our poor consumers the financial relief given them by the Supreme 
Court," Mrs. Arroyo added.

Presidential chief of staff Rigoberto Tiglao explained that when the 
President said "the soonest time possible," she would want the checks 
issued hopefully within this month.

"The President wouldn’t want any delays, she would want the checks issued 
for the refund. If the technical aspects are resolved, Meralco could very 
well issue the checks and put it in the bills, maybe in the next two 
weeks," he added.

Meralco, which last week announced a P2 billion-loss for 2002, has warned 
the refund would hurt its earnings and cash flow this year, but it would 
honor whatever refund arrangements were decided on.

The government owns about a quarter of the company and guarantees around a 
third of its debt. The second-largest shareholder is a joint venture of 
First Philippine Holdings and Union Fenosa of Spain, with 22.86 
percent.  (By Donnabelle Gatdula, Star)

Reported by: Sol Jose Vanzi

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