Definitions and key terms
- “Bill Deposit” means the deposit required from customers by distribution utilities of new and/or additional service equivalent to the estimated billing for one month to guarantee payment of bills.
- “Consumer or Customer or End-user” means a registered customer of an electric utility supplied by the concerned distribution utility, or any person authorized by the registered customer to occupy the premises and enjoy electric service.
- “Distribution Utility” means any electric cooperative, private corporation, government-owned utility, or existing local government unit with an exclusive franchise or authorized by law to distribute electricity to end-users.
- “Energy Regulatory Commission or Commission or ERC” means the independent regulatory agency created under Republic Act No. 9136.
- “Heirs” means those called to succeed by will or law on succession under Article 887 of the Civil Code of the Philippines to the estate of a deceased registered customer.
- “A Registered Customer” means a customer with a valid service contract with the electric distribution utility.
- “Residential consumer” means a customer classified as such in the distribution utility’s rate schedule approved by the ERC.
- “Legal Heirs” means compulsory heirs under Article 887 of the Civil Code of the Philippines, and in their absence, collateral relatives under Article 1003 of the Civil Code of the Philippines, of the registered customer.
Article 7: refund of bill deposit rules
- Article 7 establishes the refund of the bill deposit provided under the Magna Carta: it must be refunded within one month from termination of service provided all bills have been paid.
- A customer who has paid electric bills on or before the due date for three (3) consecutive years may demand full refund of the deposit even prior to termination of service by filing an application with the concerned distribution utility, which must refund within one month from receipt of the application.
- All new and existing residential consumers may avail of the refund privilege under Article 7, subject to Article 28.
- Each electric account must be treated separate and distinct; outstanding obligations in other accounts do not affect entitlement to refund in an account.
- Only registered customers, their heirs, successors-in-interest, or duly authorized representatives may receive the refund.
- For existing customers, the three (3) year consecutive period starts at the first billing period after the effectivity of these Guidelines, and refund is available only if the customer remains a residential customer for the three (3) consecutive years.
- The refund amount equals the customer’s bill-deposit copy; if not available, the customer must execute an Affidavit attesting to loss, and the utility’s copy/records (including electronic records) are used as basis.
- The refund includes the principal bill deposit plus interests accruing thereto.
- Registered customers who are not actual users remain entitled to refund if the actual users meet Article 7 conditions.
- If the registered customer is deceased, legal heirs receive the refund in proportion to their shares to the estate, unless a waiver is executed in favor of one (1) heir; all legal heirs must sign the application unless a waiver exists.
- Successors-in-interest receive refund only upon proof (e.g., Deed of Sale or other documents) that they acquired all rights and obligations over the property, including the bill deposit.
- If any or several heirs are excluded, an application signed by persons representing to be the sole heirs exempts the utility from further liability for the deposits and interest covered, provided the utility actually paid the refund to the heirs who signed the application.
- Unclaimed refunds for bill deposits remain with the concerned distribution utility and continue to earn interest.
Article 7: refund procedure and documentary requirements
- A formal refund application must be filed after complying with three (3) consecutive payments on or before the due date, and the application must state the mode of refund.
- The allowable refund modes are cash, check, or credit to future billings.
- Applications by registered customers must be accompanied by:
- Any valid identification card (examples listed include Driver’s License, Passport, PRC License, SSS/GSIS/TIN, PhilHealth ID, Senior’s Citizen ID, Postal ID, Original NBI Clearance, or Credit Card).
- Proof of payment on or before the due date for the immediately preceding three (3) consecutive years.
- If any monthly bill is paid after its due date while the application is pending, the application is automatically denied.
- Applications by heirs or successors-in-interest must include:
- An application signed by instituted heirs (if any), all legal heirs, successors-in-interest, or the duly authorized representative of heirs/successors.
- Death proof: Death Certificate or proof of death of the registered customer.
- Proof of filiation or successional right (examples listed include birth certificates of applicants and ascendants, or marriage certificate).
- For successors-in-interest: proof of transfer of rights and obligations over the property including the bill deposit (examples listed include Deed of Sale).
- Undertaking that there are no other legal heirs.
- Identification cards (examples listed as above).
- Proof of payment on or before the due date for the immediately preceding three (3) consecutive years, with automatic denial if any monthly bill is paid after due date while pending.
- Applications by duly authorized representatives must include:
- Signed application by the representative.
- Identification card (examples listed as above).
- Special Power of Attorney authorizing receipt of the refund on behalf of the registered customer.
- Proof of payment on or before the due date for the immediately preceding three (3) consecutive years, with automatic denial if any monthly bill is paid after due date while pending.
- The distribution utility must process the application and pay the refund not later than one month from filing.
- Upon approval, the utility must notify the applicant in writing, indicating the amount of refund and the claim period/date; upon denial, the utility must notify in writing stating the reasons for denial.
- After approval, a customer may claim via cash/check/postal money order/credit to future billings at the customer’s option.
- If the customer is notified of approval but fails to claim, the refund remains with the utility and continues to earn interest.
- If the customer later defaults in payment of monthly bills, the refund is applied to the payment of the reimposed bill deposit; any excess is applied to future billings.
Article 8: meter deposit exemption, refund, and escalation
- Article 8 provides that all consumers are exempt from paying meter deposits, because private distribution utilities incorporate the cost of meters into their rate base.
- Electric cooperatives must use their Reinvestment Funds to procure meters for their consumers.
- If an electric meter is lost and/or damaged due to the fault of the customer, the customer must bear the replacement cost.
- All new residential consumers of distribution utilities are exempt from meter deposits.
- Existing residential consumers may opt for refund of meter deposits; otherwise deposits continue earning interest.
- Customers who paid for meters are entitled to reimbursement of meter costs by present occupants who continued using the meters, subject to subsequent reimbursement by the electric cooperative.
- Only registered customers, their heirs, their successors-in-interest, or duly authorized representatives may receive meter-deposit refunds.
- The refund amount is based on the customer’s meter-deposit copy; if lost, the customer executes an Affidavit of loss and the utility’s records (including electronic records) are used.
- The refund includes the principal meter deposit and interests accruing thereto.
- For private utilities, the interest rate for meter-deposit refunds is the rate applicable when the residential customer applied for electric service, which may be six (6%) percent, the rate in Revised Order No. 1, or ten (10%) under Section 22 of ERB Resolution No. 95-21, as amended.
- For electric cooperatives, refunds are made without interest.
- If the registered customer is deceased, legal heirs receive the refund in proportion to estate shares unless there is a waiver in favor of one (1) heir; all legal heirs must sign unless waived.
- Successors-in-interest receive refunds only upon proof (e.g., Deed of Sale or other documents) that they acquired the rights and obligations, including the meter deposit.
- If any heirs are excluded, the application signed by persons representing to be the sole heirs exempts the utility from further liability for deposits and interest covered if the utility actually paid all signatory heirs.
- For private utilities, meter-deposit refunds must be implemented through phased schedules:
- Phase 1: customers registered on the 1st year to 10th year of operation — January 1, 2006 to June 30, 2006
- Phase 2: 11th year to 20th year — July 1, 2006 to December 31, 2006
- Phase 3: 21st year to 30th year — January 1, 2007 to June 30, 2007
- Phase 4: 31st year to 40th year — July 1, 2007 to December 31, 2007
- Phase 5: 41st year to 50th year — January 1, 2008 to June 30, 2008
- Phase 6: 51st year to 60th year — July 1, 2008 to December 31, 2008
- Phase 7: 61st year to 70th year — January 1, 2009 to June 30, 2009
- Phase 8: 71st year to 80th year — July 1, 2009 to December 31, 2009
- Phase 9: 81st year to 90th year — January 1, 2010 to June 30, 2010
- Phase 10: 91st year to present year of operation — July 1, 2010 to December 31, 2010
- After two (2) years from each phase, unclaimed meter deposits from that phase must be placed in an escrow account at a bank, including principal and any interests.
- The utility must inform the ERC in writing of deposits placed in escrow.
- If placed in escrow, the concerned customer must claim within ten (10) years from deposit from the escrow bank.
- After a ten (10) year period from the date unclaimed meter deposits of each phase were placed in escrow, the State through the Office of the Solicitor General initiates escheat proceedings in the Regional Trial Court where the bank is located, and unclaimed deposits are declared escheated in favor of the State after due notice and hearing.
- For electric cooperatives, refunds come from their Reinvestment Funds; if a cooperative required a customer to post a meter deposit, refund comes from the deposit account and takes last priority in use of the Reinvestment Fund for that year.
- For electric cooperatives, in making refunds, older registration is refunded earlier.
- If a cooperative’s Reinvestment Fund is insufficient, the cooperative applies to the ERC for an increase.
- The refund may be applied to adjustments on a bill deposit due to updating or to any outstanding obligations owed to the utility.
- Electric cooperatives must provide and submit their proposed implementation scheme to the ERC for approval.
- Distribution utilities must advise customers of the refund schedule, mechanics, requirements, and other pertinent information.
- Nothing prevents private distribution utilities from issuing their own guidelines, provided they are consistent with these Guidelines.
Article 8: meter deposit refund procedures
- A formal application must be filed by registered customers, heirs, successors-in-interest, or duly authorized representatives, indicating the mode of refund.
- Refund modes are cash, check, or credit to future billings.
- Applications require supporting documents:
- Registered customers must submit identification card(s) from the list of examples.
- Heirs or successors-in-interest must submit:
- An application signed by instituted heirs (if any), all legal heirs, successors-in-interest, or duly authorized representative.
- Identification cards (examples listed).
- Death Certificate or proof of death.
- Proof of filiation/successional right (e.g., birth certificates or marriage certificate).
- For successors-in-interest: proof of transfer of rights and obligations including the meter deposit (e.g., Deed of Sale).
- Undertaking that there are no other legal heirs.
- Authorized representatives must submit:
- Identification card(s) from the list of examples.
- Special Power of Attorney authorizing receipt of refund on behalf of the registered customer.
- The distribution utility must process the application.
- After approval, the utility must notify the applicant in writing that the application is granted; in case of denial, it must notify in writing stating reasons.
- If the customer is notified of approval but fails to claim, the utility may deposit the amount in escrow at a bank; escrow must include principal and any interest.
- If deposited in escrow, the customer must claim within ten (10) years from escrow deposit.
- After ten (10) years from escrow deposit for deposits of each phase, the State through the Office of the Solicitor General initiates escheat proceedings in the Regional Trial Court where the bank is located, and thereafter declares the deposits escheated in favor of the State after due notice and hearing.
Article 14: extension of lines and facilities
- Article 14 grants a consumer within thirty (30) meters from a distribution utility’s existing secondary low voltage lines the right to an extension of lines or installation of additional facilities (other than a service drop) at the utility’s expense, with assets eventually forming part of the rate base of private distribution utilities or being sourced from electric cooperatives’ Reinvestment Funds.
- If a prospective customer is beyond thirty (30) meters, or if demand load requires extension by the utility, the customer may initially fund the necessary expenditures.
- To recover customer-funded expenditures under Article 14, the customer may demand:
- Issuance of notes payable from the distribution utility; or
- Refund at the rate of twenty-five (25) percent of the gross distribution revenue derived for the calendar year; or
- If available, purchase of preferred shares.
- Revenue derived from additional customers tapped directly to the poles and facilities extended must be included in determining gross revenues derived from the extension of facilities.
- If a developer initially paid for line-extension costs to provide service to a property and incorporated those expenses into the property’s cost, and the property was transferred to the registered customer, the registered customer is entitled to refund of the extension costs and may exercise the refund options under Article 14.
- If the extension cost was funded gratuitously by other persons for the benefit of the customer, Article 14 refund rights do not apply.
- Utilities must furnish the ERC a semi-annual report listing customers who made cash advances under Article 14, the cash-advance amounts, and the mode of refund.
- All new and existing residential consumers are subject to Article 14.
- For private distribution utilities, the second sentence of Article 14 applies only if extension costs were not included in the private utility’s CAPEX approved by the ERC; otherwise, the private distribution utility bears the cost regardless of distance, since the assets form part of its rate base.
- For electric cooperatives, extension lines and additional facilities are funded from Reinvestment Funds; if insufficient, the cooperative applies to the ERC for an increase.
- The cost must be reimbursed upon proper showing of documents proving payment (e.g., receipts).
- Distribution utilities must require developers, under oath, to disclose the total cost of electrical installations/extensions for a project and whether the cost was incorporated into the purchase price; if incorporated, the utility requires the developer to execute a waiver to recover the amount in favor of the concerned customers and the utility informs customers of the refund amount.
- If the proportionate share of refund to a customer cannot be determined from total installation/extension cost, the refund is held by the Homeowners’ Association in trust for concerned customers.
- Third-party claims for reimbursement require proof of authority via:
- A special power of attorney from the person/entity that initially paid for extension costs; or
- A duly notarized deed of assignment if the right to claim reimbursement was previously assigned.
- Reimbursement claimants must execute a duly notarized undertaking holding the utility free and harmless from complaints or disputes regarding the claim.
Article 28: obligation to post bill deposit
- Article 28 requires a bill deposit from all residential customers to guarantee payment of bills for new and/or additional service.
- The bill deposit amount equals the estimated billing for one month.
- After one (1) year and every year thereafter, the bill deposit must be correspondingly increased/decreased to approximate actual average monthly bills.
- Distribution utilities must pay interest on bill deposits equivalent to the interest incorporated in their Weighted Average Cost of Capital (WACC); otherwise, the bill deposit earns interest per annum in accordance with the prevailing interest rate for savings deposits as approved by the Bangko Sentral ng Pilipinas (BSP).
- Interest on bill deposits must be credited yearly to the customer’s bills.
- If a customer previously received a refund of bill deposit under Article 7 and later defaults on monthly bill payments, the customer must post another bill deposit and loses the right to future bill-deposit refunds except upon termination of electric service.
- New residential consumers for new/additional service and existing residential customers for additional services are subject to Article 28.
- If the interest rate used is the BSP-approved savings deposit rate, the same rate applies to the corresponding months when that rate was effective.
- When a registered customer is entitled to a refund of the bill deposit, the refund may be applied to adjustments on bill deposit and other duly established obligations owed to the utility.
- If the customer previously received an Article 7 refund and later defaults, a bill deposit is reimposed and the customer remains liable for it; the refund right is lost except upon termination of electric service.
- If the registered customer dies, heirs are jointly and severally liable for adjustments from yearly bill-deposit updating and for any reimposed bill deposit if refunded previously.
- If the registered customer no longer occupies the premises, successors-in-interest are liable for adjustments from yearly updating and for any reimposed bill deposit if refunded previously.
- Yearly interest must be credited to the customer’s monthly bill after determination.
- Non-payment of the reimposed bill deposit is a ground for disconnection of electric service.
Final rules on conflicts and separation
- These Guidelines contain a separability clause: invalid provisions do not affect the remaining provisions.
- In case of conflict between these Guidelines and the Magna Carta for Residential Electricity Consumers, the Magna Carta prevails.