ERC ordered MERALCO to start Phase 4 refund

The Energy Regulatory Commission (ERC) approved on June 29, 2005 the implementation of Manila Electric Company’s (MERALCO) modified Phase IV refund schedule. This paves the way for the completion of the refund of more than PhP30 Billion pursuant to the Decision of the Supreme Court. “The Commission has to act with expediency to best serve the interests of the consumers”, ERC Chairman Rodolfo B. Albano, Jr. stressed.

The Commission approved two (2) major points on the amended refund implementation: a) the refund period; and b) the mode of refund, as follows:

Terminated services pertain to those services whose contracts were already terminated as of April 30, 2003.

The refund will be made to the registered customer in equal amounts over a period of time through post-dated checks (PDCs), fixed credit to bills, refund check or cash. Customers with active services under Phase IV-A and whose Gross Refund Amounts (GRAs) are PhP5,000.00 or less will receive the refund in full at the start of the period, while other customers may avail of the cash refund on a staggered basis. The said GRA was increased by the Commission from its original amount of PhP2,000.00 or less, due to the deferment in the implementation of the original Order.

Customers with terminated services under Phase IV-A can claim their refund in the form of refund checks while those falling under Phase IV-B may opt for cash, refund check, or PDC.

In this connection, the Commission directed MERALCO to reclassify all government accounts falling under Phase IV-B to Phase IV-A as this refund will be used for public purpose. Likewise, the Commission directed MERALCO to publish in a newspaper of general circulation, the names of all customers with terminated accounts who have not yet claimed their refunds under Phases I, II, and III. “We have to reach those customers who might have changed residences and which cannot be reached through letters sent by MERALCO to their last known addresses”, Chairman Albano pointed out.

The refundable amount will be equivalent to the GRA less applicable deductions like arrears and withholding tax imposed by the Bureau of Internal Revenue (BIR) which considered the refundable amounts as income payments. The Phase IV refund will entail an amount exceeding PhP18 Billion or sixty two percent (62%) of the whole refundable amount.

The implementation on January 28, 2005 was deferred upon motion by MERALCO to afford it ample time to comply with the mechanics of the BIR order which directed it to withhold tax on the refundable amount under Phase IV.

ERC Case No. 2001-243 MERALCO Phase IV Refund

July 14, 2005

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