Power distributors oppose ERC order on meter deposit refunds

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A number of distribution utilities (DUs) including Manila Electric Co. (Meralco) continue to oppose a directive of the Energy Regulatory Commission (ERC) placing unclaimed meter deposits in an escrow account way past the program’s due completion date in 2013.

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Meralco pointed out that placing the unclaimed meter deposits in an escrow account would entail a longer refund processing time, which would cause inconvenience for customers.

Instead of an escrow arrangement, Meralco proposed that there should be a single account in the name of DUs in trust for claimants of un-refunded meter deposits.

A number of DUs also claimed that they could not fully implement the ERC directive to place in escrow the unclaimed deposits.

This, according to the DUs, is due to incomplete records identifying the amount of meter deposits and the names of the registered customers.

Some DUs also pointed out that unclaimed meter deposits are payable to those customers who terminated contracts. Additionally, deceased registered customers often have numerous heirs so entitlement to the refund becomes a civil issue.

Missed 2013 deadline
The ERC’s original directive was that the refund process and placing in escrow of the unclaimed deposits should have been completed by December 2013.

The DUs are now proposing that instead of a formal escrow arrangement, the unclaimed meter deposits be placed in a single bank account under the name of the DU in trust for the claimants for two years.

The ERC is aiming to finalize the amended rules governing the refund of meter deposits to residential and non-residential customers in the fourth quarter of this year.

The ERC said it has conducted public consultations with stakeholders to address the issues raised by the DUs after inquiries on the status of the implementation of meter deposit refunds.

According to the ERC, it has reviewed the Meter Deposit Refund (MDR) Rules to make the refund directive viable for DUs.

In its promulgation of the Magna Carta for Residential Electricity Consumers and its guidelines in July and November of 2004, respectively, ERC exempted residential customers from paying meter deposits since the meters are capital properties of DUs.

The Magna Carta contained a directive to the DUs to refund meter deposits.

In April 2006, the same directive to refund was applied to non-residential customers through the implementation of Distribution Services and Open Access Rules (DSOAR).

Two years later, the ERC promulgated the Rules to Govern the Refund of Meter Deposits to Residential and Non-Residential Customers.

The Rules, for cases of unclaimed amounts, directed the DUs to place all unclaimed meter deposits and accumulated interest in an escrow account in a bank for 10 years and that the State, through the Office of the Solicitor General (OSG) should be notified of such deposits.

The escrow agent bank was to hold the money in trust and follow instructions involving accounting, separation and the preservation of the funds.

After ten years, all unclaimed meter deposits in escrow would, after due notice and hearing, be escheated or waived in favor of the State.

An escheat proceeding serves to ensure that property is not left in “limbo” or in an uncertain state without recognized ownership.

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