THE Supreme Court has ordered the Energy Regulatory Commission (ERC) and the Manila Electric Co.

to
justify the imposition and collection of bill deposit from power customers.

In a one-page resolution released to the media on Tuesday, the Court en banc gave the ERC, Meralco, as
well as the Commission on Audit (COA) 10 days to submit their comment on the petition assailing the
collection of bill deposit.

The ERC, Meralco and COA were named by several party-list groups led by Bayan Muna Chairman Neri J.
Colmenares and Party-list Rep. Carlos Isagani T. Zarate as respondents in the petition.

Also among the petitioners are Anakpawis Party-list Rep. Ariel B. Casilao, Gabriela Women’s Party-list
Reps. Emerenciana A. de Jesus and Arlene D. Brosas, Act Teachers Party-list Reps. Antonio L. Tinio and
Francisca L. Castro, Kabataan Party-list Rep. Sarah Jane I. Elago and Bagong Alyansang Makabayan
Secretary-General Renato M. Reyes Jr.

The petitioners argued that the imposition of bill deposit by Meralco, being a public utility, against its
captive market is illegal and contradicts its duty under its franchise to promote consumer interest.

The bill deposit collected by Meralco from its customers, according to the petitioners, has reached P29
billion, as of 2018.

The petitioners asked the Court to declare as illegal and void the Bill Deposit provisions in the Magna
Carta for Residential Electricity Consumers and promulgated by the ERC on June 17, 2004, which became
Meralco’s basis for collecting such fees from its customers.

They also urged the Court to order the ERC to implement the refund of the bill deposits to the
consumers.

The Magna Carta defines bill deposit as the deposit required from customers by distribution utilities of
new and/or additional service equivalent to the estimated billing for one month, in order to guarantee
payment of bills.
However, the petitioners said the Bill Deposit provision under the Magna Carta is not allowed under the
Electric Power Industry Reform Act (Epira) of 2001 and the Meralco franchise.

Based on the Epira, the petitioners said Meralco, as a distribution utility, may only collect from its
consumers distribution wheeling charges, connection fees and retail rate.

The imposition of bill deposit, according to the petitioners, does not promote the interest of the
consumers but only profits distribution utilities.

The petitioners noted that the bill deposit is being comingled with Meralco’s general fund and being
used for other purposes, including investments in financial instruments and operations-related taxes.

Comingling of funds, according to the petitioners, renders the bill deposit vulnerable to wrong business
decisions and investments, mismanagement, miscalculation or risks, legal cases which deplete the funds
of Meralco — which could affect the latter’s capacity to refund the Bill Deposit to its consumers.

The petitioners asked the SC to order the Commission on Audit (COA) to conduct an audit of all the
funds collected from consumers since the imposition of the Bill Deposit requirement, the actual interest
earned by Meralco from the same, the amount so far refunded to the consumers and the balance of the
amount that has not been refunded.