Meralco consumers furious over bill deposit update

MANILA, Philippines – Several consumers of Manila Electric Company (Meralco) expressed outrage on social media Saturday, June 27, over its Annual Update of Bill Deposit program (AUBD), which they called unnecessary and unjust.

A bill deposit, according to Meralco Spokesperson Joe Zaldarriaga, is equivalent to the estimated billing for one month, serving as a security for unpaid bills.

Under the collection arrangement, a customer, who paid a bill deposit of P1,500 when he had his electricity connection installed, could expect to see P500 added to his next bill when his average monthly consumption for the past 12 months reaches P2,000.

He could expect a refund of P500 if his average monthly consumption for the past year is only P1,500.

This deposit, which Meralco keeps to itself, earns an annual interest that is “based on Land Bank of the Philippines rates and is almost the same as savings interest rates,” Zaldarriaga said.

Upon receiving their electricity bills on Saturday, some Meralco consumers questioned the need for bill deposits, saying the service provider cuts the power supply anyway when customers fail to pay on time.

@MovePH Why do they need to get a deposit when they cut off your services anyway when you miss a payment?

— Judy De Leon (@jvdeleon03) June 27, 2015

Responding to the netizen’s query, Zaldarriaga said in a text message: “This is an amount required from all customers of all distribution utilities as a guarantee for payment of electricity bills. It is similar to the advance deposit made by a tenant who rents an office or a residence.”

@MovePH @rapplerdotcom another scheme to keep meralco profits zooming high using people’s funds. And we have no choice but to pay. Poor us!

— rhoda adriano (@ohdadear) June 27, 2015

Deposit refund

The Meralco Spokesperson confirmed that consumers are entitled to a refund of the entire bill deposit if they managed to pay their electric bills religiously for a continuous period of 3 years.

“Yes, deposit needs to be updated. However, customers with good payment record of consistently paying on or before the due date for 3 consectutive years are eligible to avail of the refund of their bill deposit and accrued interest and there is no need to add additional deposit,” Zaldarriaga explained via text message.

Asked how Meralco determines if a bill deposit is enough, Zaldarriaga cited 3 key takeaways:

• ​​If the bill deposit is greater than the average bill by more than 10%, the excess bill deposit will be refunded to the customer through his bill/s
• If the bill deposit is less than the average bill by more than 10%, additional bill deposit equivalent to the insufficient amount will be collected from the customer
• If the difference falls within the allowable difference, the customer will be exempted from the collection of insufficient deposit and will not qualify for the refund of amount beyond the required deposit

“Actually, other customers have in fact been getting refunds since their bill deposit is greater than their average bill,” Zaldarriaga explained.

@MovePH I think I did. more reasons to get your money from otherwise overpriced service #bullshit

— Steele Sheen (@steelsheen) June 27, 2015

Lack of consumer information?

But some of the Meralco consumers said they did not know about this because Meralco itself did not take the initiative to inform them about the AUBD.

Zaldarriaga rebutted this and said Meralco informed state regulator Energy Regulatory Commission (ERC) about it and even had several public consultations before the AUBD was regulated.

“Yes, there were public consultations conducted before the rules were approved,” Zaldarriaga said when asked if Meralco informed ERC about the bill deposit update.

Meralco’s AUBD was implemented in 2012 as prescribed by the Magna Carta for Residential Electricity Consumers and the Distribution Services and Open Access Rules (DSOAR), the service provider said in its website.

The Magna Carta for Residential Electricity Customers, issued by the ERC on June 9, 2004, in line with Republic Act No. 913 or the Electric Power Industry Reform Act, provides a so-called bill deposit that can be refunded upon termination of service, or will be the basis of either an addition or deduction of charges based on the monthly average consumption.

The purpose of the deposit, however, was not indicated. Zaldarriaga only said, “Since all refund programs are nearing completion, Meralco is now implementing the AUBD.”

The Magna Carta notes that failure to pay the required bill deposit shall be a ground for disconnection of electric service.

Rappler asked for the total bill deposit held by Meralco and whether these were not enough and caused Meralcoto incure losses; how much interest these deposits have earned over the years; and the growth in these bill deposits.

The Meralco spokesperson, however, cannot answer these queries immediately, saying: “I don’t have data with me. Since it automatically adjusts based on actual consumption, it also reflects the current consumption of both those who received a refund and those who had to add.” – Rappler.com