Scribd Logo
Upload

Welcome to Scribd!

  • 9 views

    Power Distributors Owe Consumers P200

    Uploaded by

    bpatriciagreg
    1) A Philippine legislator argues that power distributors owe consumers around P200 billion in refunds due to the Energy Regulatory Commission's failure to recalculate the weighted average cost of capital as mandated by law. 2) This alleged failure resulted in power distributors charging consumers higher electricity rates using an outdated cost of capital figure from 2016-2022. 3) The legislator estimates Meralco consumers in Manila should receive P105 billion in refunds, while consumers outside Meralco should receive P100 billion in refunds from their respective distributors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Power Distributors Owe Consumers P200

    Uploaded by

    bpatriciagreg
    9 views1 page
    1) A Philippine legislator argues that power distributors owe consumers around P200 billion in refunds due to the Energy Regulatory Commission's failure to recalculate the weighted average cost of capital as mandated by law. 2) This alleged failure resulted in power distributors charging consumers higher electricity rates using an outdated cost of capital figure from 2016-2022. 3) The legislator estimates Meralco consumers in Manila should receive P105 billion in refunds, while consumers outside Meralco should receive P100 billion in refunds from their respective distributors.

    Original Description:

    Cost capital bsa

    Original Title

    Power distributors owe consumers P200

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) A Philippine legislator argues that power distributors owe consumers around P200 billion in refunds due to the Energy Regulatory Commission's failure to recalculate the weighted average cost of capital as mandated by law. 2) This alleged failure resulted in power distributors charging consumers higher electricity rates using an outdated cost of capital figure from 2016-2022. 3) The legislator estimates Meralco consumers in Manila should receive P105 billion in refunds, while consumers outside Meralco should receive P100 billion in refunds from their respective distributors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9 views1 page

    Power Distributors Owe Consumers P200

    Uploaded by

    bpatriciagreg
    1) A Philippine legislator argues that power distributors owe consumers around P200 billion in refunds due to the Energy Regulatory Commission's failure to recalculate the weighted average cost of capital as mandated by law. 2) This alleged failure resulted in power distributors charging consumers higher electricity rates using an outdated cost of capital figure from 2016-2022. 3) The legislator estimates Meralco consumers in Manila should receive P105 billion in refunds, while consumers outside Meralco should receive P100 billion in refunds from their respective distributors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Power distributors owe consumers P200-B refund --- Laguna solon

    The cost of capital in the power distribution sector is influenced by factors including the cost of debt and
    equity, as well as regulatory considerations. Power distributors operate as regulated monopolies, limiting
    their ability to set rates arbitrarily. The cost of capital affects the rates that power distributors can charge
    consumers, with higher costs leading to higher rates. It also impacts investment opportunities, with a
    high cost of capital deterring potential investors and a lower cost attracting more capital investment.
    Power distributors must carefully consider the cost of capital to ensure financial sustainability and meet
    investor and consumer expectations.

    The issue at hand is the alleged failure of the Energy Regulatory Commission (ERC) to conduct a
    recomputation of the weighted average cost of capital (WACC) in the power distribution sector, as
    mandated by Republic Act (RA) 9136 or the Electric Power Industry Reform Act of 2001. Santa Rosa City
    Rep. Dan Fernandez argues that this failure has resulted in higher energy costs for consumers in the
    Philippines. He claims that the ERC used an outdated WACC of 14.97 percent, while it should have been
    around six to eight percent for the period from 2016 to 2022. As a result, Fernandez estimates that
    Meralco energy consumers in Metro Manila should receive a refund of P105 billion, while consumers
    outside Meralco's jurisdiction should receive a refund of P100 billion from their respective distributors.
    The issue started with the ERC's alleged negligence in conducting the recomputation of the WACC, which
    Fernandez believes has led to excessively high electricity costs for consumers and driven away
    prospective investors to neighboring countries.

    Consumers have been charged over P430 billion since 2016, according to Santa Rosa City Rep. Dan
    Fernandez. He highlighted this amount during a House Committee on Energy hearing, emphasizing that
    it was collected from consumers and should be returned in full. The impact of the Energy Regulatory
    Commission's failure to conduct a recomputation of the weighted average cost of capital (WACC) is that
    it has resulted in higher energy costs for consumers in the Philippines. The WACC is a key factor in
    determining the rates that power distributors can charge consumers. In this case, Santa Rosa City Rep.
    Dan Fernandez argues that the ERC used an outdated WACC of 14.97 percent, when it should have been
    around six to eight percent for the period from 2016 to 2022, this discrepancy has led to consumers
    being charged higher electricity prices, making the cost of electricity in the country one of the highest, if
    not the highest, in the region.

    To avoid similar scenarios in the future, it is crucial to strengthen regulatory oversight by ensuring that
    the ERC fulfills its responsibilities, conducts timely recomputations of the WACC, and closely monitors
    power distributors' operations. Transparency and accountability should be promoted, with accurate
    financial information provided by power distributors and thorough audits conducted by the ERC.
    Additionally, robust consumer protection measures should be implemented, including mechanisms for
    refunding excessive charges and avenues for consumer complaints and redress. Stakeholder engagement
    is vital to develop effective policies and regulations that consider the interests of all parties involved. By
    implementing these measures, the power distribution sector can avoid scenarios where consumers are
    overcharged, investors are driven away, and the country's energy costs become unreasonably high.

    You might also like