Meralco’s AWAT True-Up Debacle

Meralco’s AWAT True-Up Debacle

Jul 9, 2024, 12:38 PM
Butch L. Junia

Butch L. Junia


“The flaw in the procedure observed by the Commission in arriving at the questioned Decision in this case (the AWAT Decision) painfully resulted in an outcome that is riddled with legal infirmities and, most tragically, shrouded in regulatory mystery. By denying and dismissing the various Motions for Reconsideration in this instant Order, the majority of the members of this present Commission (hereinafter, the “Majority”) not only denied the Energy Regulatory Commission (ERC) the opportunity provided by law to administrative agencies to correct mistakes, but also deprived electricity consumers of MERALCO (as well as other private distribution utilities or PDUs) their legally –protected right to transparent and reasonable pricing that can only result from the conduct of a full and proper evaluation and validation process. In this instance, the Majority has effectively ruled that this right of the consumers can be sacrificed at the altar of expediency.”

“In this light, I DISSENT from the instant Order. xxx”

Dissenting Opinion of Chairperson and CEO, Monalisa C. Dimalanta.

“A regulator’s failure to ensure full transparency, due process and due diligence in the setting of electricity rates is symptomatic of a regulator’s reduced fidelity to its constitutional and statutory obligations. This leads to corrosive regulation – a regulation that destroys rather than support public interest and the industry it regulates.

“Adherence to due process is the most fundamental and most important requirement in every government action. It is meant to protect the governed from the actions of those mandated to govern… xxx

“Further, the failure of the regulator to undertake due diligence, through the verification and validation of data submitted by the Applicant, is a direct affront to the state policy of protecting

“the public interest as it is affected by the rates and services of electric utilities and other providers of electric power” which Section 2(f) of the EPIRA demands.

“Non-compliance with such requirements is an incurable defect that should render government action void ab initio.

“By this dissenting opinion, I wish to convey my strong and firm dissent to the Majority’s decision, denying the intervenor’s Motions for Reconsideration on its Decision dated 16 June 2022 wherein a mere “Confirmation and True-up Process”, in setting the rates for the regulatory years 01 July 2015 to 30 June 2022, was adopted.

“This action on the part of the Majority is legally and procedurally infirm on many fronts. xxx”

Dissenting Opinion of Commissioner Catherine P. Maceda.

On the other hand, the Energy Regulatory Commission (ERC) in its official website post captioned ERC DENIES MRS, AFFIRMS MERALCO’S AVERAGE RATE AND REFUND

SCHEME, had this to say in defense of the Decision: “In a 3-2 vote, the Commission resolved to deny the Motions for Reconsideration (MRs) filed in July 2022 xxx The Commission highlighted that it exercised its general rate-setting authority and power to act on applications under the

EPIRA in approving MERALCO’s AWAT application. Without any definite rate-setting rules to govern the subsequent regulatory period for all entry groups under the Performance Based Regulation (PBR), the lapsed regulatory years continue to expand for all Private Distribution Utilities (PDUs), where no applicable rate was set, for approximately seven (7) years for the First Entry Group in which MERALCO is included. “When MERALCO filed its AWAT

Application with the Commission, it had to act and decide on the said application,” the Commission said. With its Decision, the Commission was able to address the long-drawn-out Lapsed Period of MERALCO’s regulatory reset cognizant of its intricacies and the need to ultimately put the Lapsed Period to a closure.”

Official Post in ERC website June 16, 2024.

The ERC Order dated January 25, 2024 denying our Motions for Reconsideration filed July 2022 was released after business hours of June 13, 2024, barely days before the 2nd anniversary of our MR filings and well after the so-called refunds had been made and completed under provisional authorities granted by ERC to Meralco. I note the time lags and the gaps to highlight regulatory stupors and delays, mostly as they fit Meralco’s interests.

The 332-page order (70 pages’ majority, 262 dissenting) highlighted deep divisions in the Commission arising from ERC’s violations of consumers’ substantive and due process rights under a modified PBR methodology the Majority irregularly adopted and erroneously applied in Meralco’s AWAT case. The opening salvos in the Dissents sum up those divisions.

There is so much to unpack from the preceding quotes. And so much more in the details and discussions in the clash of opinions between the 3-vote majority and the two dissents. The lame excuses and illogical reasoning of the majority, a residual from the Commission that concocted

Confirmation and True-up as substitute for rate reset, is eviscerated by the scorching dissent based on the law, the facts, the processes and the fundamental rights of captive consumers.

A few have already weighed in on the decision, including a one-time official of ERC and another a luminary from the legal academe. None, however, has gone into the details and background that is necessary to appreciate fully the contours of the case. I am one of the three (3) whose MR was denied. I have been on this and other related cases that will give full context to the case. I will try in succeeding articles to unpack this case. And to highlight from my perspective the faults and flaws of the Commission in implementing a modified PBR to suit Meralco’s ends.

All these are already in the records of this case. And if you have the time and the inclination, go to: https// and download/read the 332-page Order.

Meanwhile, for the next installment, we will start with the Original Sin, the ERC order Meralco did not comply with in July 2011 but ERC did not enforce either, leading to the so-called Lapsed Period.

Now, if it was Meralco’s failure to comply in 2011 that led to the Lapsed Period, why did the Commission ‘Majority” accept, in toto, Meralco’s AWAT application as the solution to the long- drawn-out Lapsed Period Meralco caused, to begin with.

That, too, is in the dissent.


Romeo “Butch” Junia is an Intervenor in a number of Meralco cases, including ERC Case No. 2020-043RC, Meralco Application for: A) Confirmation of True-Up Calculation of the Actual Weighted Average Tariff (AWAT) Vis-à-Vis ERC Approved Average Rate Implemented for the Lapsed Regulatory Years; and, B) Approval of the Final Refund Scheme to Account for the Lapsed Regulatory Years.

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