THE Supreme Court has affirmed the authority of the Energy Regulatory Commission to require the imposition of bill deposits from consumers, saying it is a valid exercise of its rate-fixing authority to ensure the financial stability of power distributors.
In a ruling promulgated on October 8, 2024 but published on the SC website only last Monday, the Court en banc denied the petition of former Bayan Muna Rep. Neri Colmenares challenging the ERC’s power to allow distribution utilities, such as the Manila Electric Company, to collect bill deposits from their consumers.
The ERC in 2004 promulgated the Magna Carta for Residential Electric Consumers, which required residential consumers to pay bill deposits as a guarantee for their electricity payments.
The deposit amount is equivalent to the estimated billing for one month and can be used to pay overdue bills.
Deposits earn annual interest based on the Landbank of the Philippines’ savings account rates, and the interest is credited to the customers’ accounts each year. Customers are also entitled to a refund of their deposit after terminating their electricity service.
The ERC later issued guidelines to operationalize the collection and refund of bill deposits.
In 2019, Colmenares and other petitioners assailed before the SC the legality of the bill deposit requirement, saying it lacked adequate regulation and was illegal because it has no basis under the EPIRA law.
The petition also asked the SC to prohibit the commingling of bill deposits with other funds and its use for other purposes and to pay interest rates earned by the bill deposits.
Joining Colmenares in the petition are former Bayan Muna Rep. Carlos Zarate, former Anakpawis party-list Rep. Ariel Casilao, Gabriela party-list Rep. Emmy De Jesus and Arlene Brosas, ACT Teachers party-list Rep. Antonio Tinio, Bayan Secretary General Renato Reyes Jr., and Kabataan party-list Rep. Sarah Jane Elago.
However, the SC denied their petition for being premature, emphasizing that judicial review requires an actual and completed government action that adversely affects the petitioners.
Since the ERC’s Rules on Bill Deposits are still under development, the SC held there is no final act to challenge.
“It is not our function to issue an advisory opinion on the questions of policy and regulations of administrative agencies. 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,” said the SC ruling penned by Senior Associate Justice Marvic Leonen.
The High Court said it understands the reason and motivation of the petitioners in seeking intervention and in attempting to correct the disparity in power and resources between a distribution utility and a regular customer that the scheme of bill deposits perpetuates, but because of the “glaring defect” of the petition and the “prematurity” of its filing, it cannot grant the reliefs that it prayed for.
With the decision, the ERC retains its authority to require and regulate bill deposits, ensuring the continued viability of electricity distributors while promising safeguards for consumers through refunds and accrued interests.