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Makabayan bloc asks SC to rule on legality of Meralco deposits

makabayan bloc asks sc to rule on legality of meralco deposits 816x445 - Makabayan bloc asks SC to rule on legality of Meralco deposits
ERC 071118 - Makabayan bloc asks SC to rule on legality of Meralco deposits
PHILSTAR

THE Makabayan bloc filed a petition before the Supreme Court (SC), questioning the legality of the bill deposits collected by Manila Electric Co. (Meralco) from its consumers.

In an 36-page petition, Makabayan bloc, led by Senate candidate Neri J. Colmenares, said it asked the SC to stop Meralco from collecting the bill deposit, saying the provision is not allowed under the Electric Power Industry Reform Act (EPIRA) and the Meralco franchise.

The bloc said that under EPIRA, distribution utilities are only entitled to impose distribution wheeling charges and connection fees as approved by the Energy Regulation Commission (ERC). It also said that a distribution utility has the obligation to supply power in the “least-cost manner” to its subscribers subject to collection of retail rates.

“It (bill deposit) is not a charge for any electric service, but rather an amount posted by consumers for future or anticipated electric service that is not paid. By its nature as mere guarantee, it does not form part of retail rate, and as such, is not an allowed exaction under the EPIRA,” it said.

It also asked the court to order ERC to implement the refund of the bill deposits to the consumers and direct the Commission on Audit to conduct audit of all funds collected from bill deposits.

The Magna Carta for Residential Electricity Consumers promulgated by ERC in 2004 provided that consumers are obliged to pay bill deposit which shall be equivalent to the estimated billing for one month when they apply for connection.

Bill deposits are to be refunded within one month after termination of service as long as all bills have been paid, while customers who paid electric bills on or before the due date for three years can demand refunds prior to the termination of service, according to the Magna Carta.

Makabayan said the bill deposits of Meralco amounted to P29 billion, based on the power company’s audited 2018 financial statements.

The Makabayan bloc also said that imposition of bill deposit is inconsistent with promotion of consumer interests under the Magna Carta.

“[T]he ERC’s authorisation of Bill Deposit in the Captive Market does not promote consumer interest; rather it only promotes the interest of DUs (distribution utility) and ensures their profit, to the prejudice of consumers,” it said.

Citing findings of the Office of the Ombudsman, the bloc said the bill deposit collected by Meralco has been “commingled” and used to finance its capital and operating costs.

“The captive consumers are being used as unwitting investors of Meralco but without the corresponding benefits and advantages. This is clearly disadvantageous to the consumers’ interest,” it said.

“Having commingled the Bill Deposit with its general funds and used for other purposes, Meralco endangers the right to refund the Bill Deposit by the consumers,” it added.

It also said that the interest rate to the bill deposit is “unfair and clearly disadvantageous to the consumers’ interest,” noting the Ombudsman findings.

The Ombudsman has said that interest on bill deposits was reduced from 10% to 0.50% in 2011 to 2012 and reached 0.25% in 2014 to 2016. However, it said that the company, despite acknowledging low interest rates in bill deposits “which appear discriminatory” on the part of the consumers, allegedly failed to adopt measures to advance the interests of its consumers by providing reasonable returns on the deposits.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly-owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Vann Marlo M. Villegas

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