SC upholds ERC power to require bill deposits from customers of power distributors
The Supreme Court (SC) has upheld the authority of the Energy Regulatory Commission (ERC) to require consumers to pay bill deposits as a security for their electric bills, affirming that this is a legitimate use of the agency’s rate-setting power to maintain the financial stability of electricity distributors.
In its decision on G.R. No. 246422 penned by Senior Associate Justice Marvic Leonen, the high tribunal en banc denied the petition filed by Bayan Muna chair Neri Colmenares and others who contested the regulatory body’s authority to allow distribution utilities, such as Manila Electric Co. (Meralco), to collect bill deposits from their consumers.
The petitioners argued that the practice had no legal basis under the Electric Power Industry Reform Act and was detrimental to consumers.
They contended that bill deposits unfairly burden consumers and should not be imposed without clear legislative authority.
The petitioners further claimed that Meralco commingled bill deposits with its general funds and allegedly used them for capital expenditures instead of safeguarding them as consumer guarantees.
A bill deposit is an amount required from all customers of distribution utilities as a guarantee for payment of electric bills.
In denying Colmenares’ petition, the high tribunal found that the ERC did not commit grave abuse of discretion in approving policy on bill deposits, which it said was a valid regulatory mechanism.
It explained that the ERC, as the industry regulator, has the power to set policies that ensure financial stability among power distributors.
The high court also ruled that the petitioners failed to demonstrate a direct injury resulting from the imposition of bill deposits, rendering their claims speculative.
In addition, the Supreme Court said that the Ombudsman’s findings against ERC officials regarding Meralco’s fund management were not sufficient grounds for them to intervene.
It emphasized that judicial review requires an actual and completed government action that adversely affects the petitioners.
Since the ERC’s rules on bill deposits were still under development, the court noted that there was no final act to challenge.
“It is premature for this Court to intervene in the delicate exercise of the ERC’s rate-fixing functions since it has yet to finalize the rules on bill deposits and the more specific mechanisms for its implementation,” the high court added.
