Meralco clarifies Enrile issues

PHILIPPINE NEWS SERVICE — THE Manila Electric Company (Meralco) today issued a statement with regard to the various issues raised by Senator Juan Ponce Enrile. One of these is on the bill deposits of customers, which the Senator is asking Meralco to refund.

The bill deposit is paid for by a customer when he applies for electric service. Meralco Vice President for Corporate Communication Elpi Cuna, Jr. said, “The charging of bill deposit is to guarantee payment of bills, as stated in Chapter III, Article 28 of the Magna Carta. Under the code, a customer is obligated to pay a bill deposit, which is equivalent to an estimated one-month bill, as opposed to the two months erroneously reported.” In addition, the Magna Carta also provides that customers’ bill deposits need to be updated annually based on the customer’s previous 12 month actual average monthly billings. Meralco, however, did not immediately implement this provision so as not to burden its customers.”

As regards the refund of the bill deposit, Cuna said, “Customers can avail of their bill deposits and the corresponding interest when they terminate their contract with Meralco.

Another deposit, the meter deposit, however, will be refunded to customers. The refund will include corresponding interest. Cuna also said that customers are now exempted from paying the meter deposit. According to him, “Meralco has ceased charging the meter deposit since the Magna Carta for residential electricity consumers and the DSOAR (non-residential customers) were implemented”

Both the refund of the meter deposit and the exemption from the payment of it came about as a result of Magna Carta for Residential Electricity Consumers and the Distribution Services and Open Access Rules (DSOAR).

“In refunding the meter deposit, we will await the final guidelines that the Energy Regulatory Commission (ERC) will set in so far as the mechanics are concerned,” Cuna assured.

On May 8, 2008, the ERC released to the public a copy of the final draft on the rules governing the meter deposit refund. Meralco was given until today May 23, 2008 to comment on the said draft. The refund of the meter deposit will then commence once the final order is received from the ERC.

In response to another refund Sen. Enrile pointed out, Cuna said that Meralco’s P30 billion refund is still ongoing. Residential and General Service (R/GS) customers with active accounts under Phases I-III, who still have refund balances, continue to receive their refund through application to bills. Refund claims of R/GS customers with terminated contracts, on the other hand, are also continuously being processed at our various business centers. The processing of refunds for customers qualified under Phase IV, which covers Commercial and Industrial customers, meanwhile, started in 2005, and is still being continuously implemented.

“As of December 2007, approximately 21 billion or 70 percent of the total amount has already been processed. On the issue of interest on the refund, the Supreme Court has already ruled that the refund will not bear interest,” Cuna stressed.

Lastly, Cuna explained the issue of the corporate electricity bill that is passed on to consumers, which Senator Enrile is also questioning. Cuna said, “All distribution utilities in the country are allowed to use 1 percent of total input for company use. This is an ERC-approved mechanism as stated in the Philippine Distribution Code (Section 3.4.1).”

“Company use” refers to the electricity Meralco uses in the operation of its business. According to Cuna, “In Meralco’s situation, though the company is allowed to pass on to its customers the equivalent of 1 percent of net system input, only 0.3 percent is being used by Meralco.”