In its April 29 Order, FERC stated that the D.C. Circuit also stated that invoking FERC policy on refunds did not eliminate the need to consider the fact that an unjust and unreasonable cost allocation had caused consumers in Louisiana to pay their utility companies too much and consumers in other states to pay too little, and that refunds, if ordered, would transfer a subset of the total overpayment to Entergy’s Louisiana operating companies from its other operating companies. Circuit remanded the case back to FERC, finding, among other things, that FERC had failed to explain its departure from its “general policy” of ordering refunds when consumers have paid unjust and unreasonable rates, and that FERC had failed to explain why the absence of over-recovery “should automatically negate refunds.” The D.C. FERC concluded that it would invoke its “equitable discretion” and follow its “general practice” of not ordering refunds in rate design and cost allocation cases.Īfter the LPSC petitioned the United States Court of Appeals for the District of Columbia Circuit (“D.C. FERC determined that Entergy Services, Inc., therefore, did not engage in an over-collection of revenue, but rather in a misallocation of revenue. (the subject of the original complaint) incorrectly allocated peak load responsibility among the various Entergy operating companies. On March 21, 2013, FERC upheld a prior determination it had made that the Entergy system as a whole collected the proper level of revenue, but that Entergy Services, Inc. under the Entergy System Agreement-an agreement between and among the Entergy operating companies-were unjust and unreasonable because they did not exclude interruptible load from the calculation of peak load responsibility. The proceedings at issue originated in 1995, when the Louisiana Public Service Commission (“LPSC”) filed a complaint at FERC alleging that certain cost allocation calculations used by Entergy Services, Inc. Specifically, FERC clarified that it will generally decline to order refunds under disputes over cost allocation, whereas refunds will generally be awarded in cases involving allegations of a utility earning more than a just and reasonable rate during the refund period. Let’s not forget that the provision of electricity is a public service and providers should only earn just and reasonable return on their investments,” ERC Chair Devanadera added.In an Aporder regarding cost allocation among the Entergy operating companies, FERC clarified and distinguished its approach to refunds in cost allocation and rate design cases, from its approach to refunds in cases of utility over-recovery (“April 29 Order”). We are confident that our Decision exercised fairness, and promoted the interests of the consuming public who bears the brunt of all these electricity charges. “The Commission has carefully evaluated the case at hand of MERALCO and considered the views and concerns of the various stakeholders. In its Decision, the ERC further directed MERALCO to effect the refund in approximately twelve (12) months or until the amount is fully refunded to its customers, and to reflect the refund rate as a separate line item in the bills of MERALCO’s customers during the refund period. Thus, the updated total refund for Residential Consumers is now at PhP1.8009/kWh to include the latest PhP21.8 B refund. MERALCO’s previous refunds are to be implemented until 2023. The ERC’s refund directive is the fourth since January 2021, as follows: (1) PhP13.9 B as per Order dated 27 January 2021 (2) PhP4.8 B as per Supplemental Order dated 23 February 2022 (3) PhP7.7 B as per Order dated 8 March 2022 (covered by various other cases) and (4) PhP21.8 B as per Decision dated 16 June 2022. We wanted to ensure that all over-recoveries shall be refunded complete with interest,”ERC Chairperson and CEO Agnes VST Devanadera emphasized. In particular, we made adjustments on the Regulatory Asset Base (RAB) and recomputed the Interim Average Rate (IAR). ![]() “The Commission endeavored to review the rate components that can be adjusted under the existing rules.
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