Press Release
June 10, 2008

REFUND METER DEPOSITS IMMEDIATELY

SEN. Loren Legarda yesterday urged Meralco to refund immediately to its customers the P21 billion worth of meter deposits, including interest, the power distribution company had collected since the 1980s.

In a directive last June 4, the ERC ordered Meralco to refund its customers billions worth of meter deposits, including interest.

Under the ERC directive, Meralco and other private distribution utilities should start issuing the refund six months after the effectivity of the rules. The rules will become effective 15 days after publication in a newspaper of general circulation.

The ERC order came weeks after officials of the Government Service Insurance System, particularly its president Winston Garcia, exposed the unlawful collection of meter deposits, among other things that Meralco did to squeeze its customers dry.

In previous orders, the commission consistently ruled that meter and bill deposit earns 10 percent per annum.

There are also several pending petitions before the commission directing Meralco to start crediting to the next monthly billing of consumers the monthly interest earned on the customers' meter and bill deposits.

Another petition asked the commission to direct Meralco to make available the accrued interest that was not applied as a reduction in the next billing cycle for any customer who may opt to demand for it

In a position paper, the National Consumers Association for Electricity Consumers expressed fears that Meralco might not be able to release the customers' meter and bill deposits and interests since the company had admitted in an ERC hearing that it had used part of these deposits for its daily operations and also invested in high-yielding financial instruments.

Because of this, the Nasecore has asked the ERC to compel Meralco to place the P2.7 billion refundable amount plus the interest in an escrow account.

Loren said the ERC order to refund has to be immediate.

"Why do people have to wait for years when the funds are supposed to be available? The consumers have suffered long enough by unjustly charging them with cost by Meralco which are not supposed to be charged to them," she said.

"The consumers suffered even more when the order to issue refund in 2004 was made, and Meraldo did not lift a finger while ERC sat on the guidelines. Will ERC impose more sufferings to consumers by making them wait forever to refund the money they rightfully own? The interest must be paid together with the principal," she added.

Loren said the ERC should stop giving in to Meralco's overtures for more time and allowances before it makes the refund.

She said the ERC must compel Meralco to implement the refund, including the interest, in cash by placing the whole amount in a bank chosen by the customers in the name of a consumer or cooperative.

On top of meter deposits, Garcia had also questioned Meralco why it passed on to consumers 72 million kilowatt-hours of electricity at a cost of P427.5 million a year.

Garcia also faulted Meralco for entering in "trillion-peso" contracts with its sister company First Gen which had been unfavorable to Meralco consumers. He called the contracts the "mother of all sweetheart deals."

The contracts allowed Meralco to buy the bulk--or about 55 percent--of its power requirement from First Gen' Sta. Rita and San Lorenzo plants which charges more than that of the state-owned National Power Corp.

Both Meralco and First Gen are owned by the Lopez family.

If Meralco will only buy from 60 to 70 percent of its electricity from Napocor, Meralco consumers will immediately see a 10 to 20 percent reduction in their electric bills, he added.

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