4 energy commissioners suspended again for unauthorized use of Meralco customer deposits

(L-R) GIPO III Cherry Bautista-Bolo and Over-all Deputy Ombudsman Melchor Arthur Carandang (Photos:www.vmmc.gov.ph / www. dwiz882am.com)

By Macon Araneta | FilAm Star Correspondent

For tolerating the misuse of bill deposits by the Manila Electric Co. (Meralco), which were co-mingled with capital or operating costs, four commissioners of the Energy Regulatory Commission (ERC) were again ordered suspended by the Office of the Ombudsman.

This was the second time in six months that the Ombudsman ordered the suspension of ERC Commissioners Alfredo Non, Gloria Victoria Yap-Taruc, Josefina Patricia Asirit and Geronimo Sta. Ana.

Their 3-month suspension was recommended by Graft Investigation and Prosecution Officer III Cherry Bautista-Bolo and approved by Over-all Deputy Ombudsman Melchor Arthur Carandang.

The suspension stemmed from the complaint for simple neglect of duty filed by the National Association of Electricity Consumers for Reforms, Inc. (Nasecor) over the ERC commissioners alleged unauthorized use by Meralco of the bill deposits of customers, and the unjust fixing of its interest rates and the non-crediting of interest in favor of the consumers.

The four commissioners were suspended in December 2017 for a year over alleged anomalous power supply deals with 38 companies, seven of which were affiliated with Meralco.

However, the Court of Appeals (CA) issued a temporary restraining order to stay their suspension.

While the Ombudsman found the respondents not liable for estafa or misappropriation of funds relative to the management of bill deposits in the new case, it held that the four failed to strictly implement the rules defining the nature of bill deposits as “mere guarantee in payment of bills,” which must be returned upon termination of the distribution utilities (DUs) service.

The Ombudsman said the respondents also failed to perform their mandate to issue rules or policies such as the creation of a separate escrow account to avoid commingling of bill deposits with the capital or operational expenses of Meralco or any other utility for that matter.

“Meralco treated the bill deposits as part of its capital without the benefit of a reasonable return of interest to accrue to consumers – a practice which respondents appeared to have acquiesced in,” the Ombudsman resolution said.

“In fact, without the letter of Nasecor respondents will continue to ignore their mandate in promoting, safeguarding and protecting the interest of the public consumers by regulating, monitoring or checking Meralco’s utilization of the bill deposits, at the very least,” read the 14-page resolution.

Rolly Faller, private legal counsel for the commissioners said the suspension order (signed on May 18 but approved on May 22) is executor but the Supreme Court held in one case that CA may issue a temporary restraining order versus the Ombudsman decision as it did in February and April.

“The suspension order is now the subject of a petition we filed with the Court of Appeals.

We will await the action of the CA on our request for TRO. We stated the need for TRO because the ERC, as a collegial body, cannot act on matters concerning public interest because the law requires a quorum of three to discharge the functions of the commission,” Faller said.

Faller said the commissions are also waiting for the decision of the Office of the President on the implementation of the order.

“Since the four commissioners are under the OP, we will also wait for the disposition of the OP as to whether it will cause the implementation of the suspension order,” he said.

Faller said that pending the implementation order from the OP, the commissions “can still discharge the functions of the office.”

Nasecore claimed that based on its projection, the total consumers’ deposits now amount to PHP 61.36 billion from 2006 to 2016 but Meralco accounted for the balance of only PHP 26.5 billion in its financial statement.

It said the consumers have been robbed a total of PHP 34.84 billion or more considering that the amount will still increase after due accounting by the ERC and COA to determine the actual amount accrued compounded interest earned by the bill deposits.

Although the respondents argued that the utilization of the bill deposits for DUs or Meralco’s operation is an acceptable practice, the Ombudsman pointed out that it does not mean that such practice is legal or advantageous to the public.
The four commissioners have filed an appeal.