Meralco bill deposit is illegal, petitioners tell SC

MANILA, Philippines–A petition has been filed before the Supreme Court to nullify the order of the Energy Regulatory Commission (ERC) allowing utility giant Manila Electric Company (Meralco) from collecting bill deposits and commingling it with its general funds for capital and operations-related purposes.

In a 36-page petition, petitioners led by Bayan Muna chair and senatorial candidate Neri Colmenares said the imposition of the bill deposit against its captive market is illegal and against its duty under its franchise to promote consumer interest.

“It does not fall under distribution wheeling charges, connection fees or retail rates allowed by Epira to be collected from consumers. Such guarantee for payment of bills on its captive market has no basis or justification and is actually illegal since payment of bills is already certain under ERC and Meralco’s policy and protocols on non-payment of monthly bills,” read the petition.

Petitioners maintained that collection of bill deposit, a refundable fund meant to guarantee payment of bills by consumers is prohibited under the Electric Power Industry Reform Act (Epira).

Under the law, Meralco can only collect from its consumers the distribution wheeling charges, connection fees and retail rate.

“Bill deposit, defined in the Magna Carta and elsewhere, as a mere guarantee for the payment of bills, obviously does not form part of the retail rate. It is not charged for any electric service, but rather an amount posted by consumers for future or anticipated electric service that is not paid,” the petitioners said.

“By its nature as a mere guarantee, it does not form part of retail rate, and as such, is not allowed exaction under the Epira,” it added.

They added that commingling the funds from bill deposits for other purposes is disadvantageous to the consumers.

“All told, in this scheme of allowing the commingling and use of Bill Deposit by Meralco, the consumers are exposed to all the dangers in the depletion of the totality of Meralco’s fund but enjoy none of the benefits of an investor should investments and other business decision result [in] increasing the Meralco’s fund and value,” the petition read.

They also noted that the utility firm is not also returning to consumers the interest rates actually earned by the bill deposits.

“From what was originally a 10% interest rate per year, the ERC and Meralco [had] reduced the interest rate to just .25% per year, allowing Meralco to profit tremendously from the bill deposit, with a return of at least 14.97%,” they said in their petition as they asked the Court to order a refund to its 6.5 million consumers.

Aside from Colmenares, other petitioners include Bayan Muna Partylist Rep. Carlos Isagani T. Zarate, Anakpawis Partylist Rep. Ariel B. Casilao, Gabriela Women’s Partylist Reps. Emerenciana A. De Jesus and Arlene D. Brosas, Act Teachers Partylist Reps. Antonio L. Tinio and Francisca L. Castro, Kabataan Partylist Rep. Sarah Jane I. Elago, Bagong Alyansang Makabayan Secretary General Renato M. Reyes, Jr.

Respondents are Energy Regulatory Commission represented by its chairperson Agnes Vicenta S. Torres-Devanadera, Commission on Audit represented by its chairperson Michael G. Aguinaldo, Manila Electric Corporation represented by its president and CEO Oscar R. Reyes./ac