MANILA, 16 November 2002 — In a landmark ruling, the Supreme Court yesterday ordered the country’s biggest power distributor to refund its customers millions of dollars for overcharging electric bills for several years.
The high tribunal did not specify the amount Manila Electric Company (Meralco) should refund its customers, but the firm earlier said it could reach up to 28.15 billion pesos ($541 million).
The case stemmed from the finding of the country’s Energy Regulatory Board (ERB) — now renamed Energy Regulatory Commission — that Meralco overcharged its customers since 1994.
The ERB ordered Meralco in 1998 to refund its customers some 10.8 billion pesos ($207 million) for the excess charges but the firm took the case to court, winning a decision in the Court of Appeals in January 2000.
The ERB then went to the Supreme Court as the amount that was to be refunded continued to grow.
In reversing the Court of Appeals ruling, the Supreme Court said the “findings and conclusions of the ERB on the rate that can be charged by Meralco to the public should be respected”.
The high tribunal gave Meralco 15 days to appeal the ruling.
In its ruling, the Supreme Court cited the need to balance “public interest” against “private profits.”
“In Third World countries like the Philippines, equal justice will have a synthetic ring unless the economic rights of the people, especially the poor, are protected with the same resoluteness as their right to liberty,” the court ruled.
“In configuring the contours of this economic right to a basic necessity of life (like electricity), the court shall define the limits of the power of respondent Meralco, a giant public utility and monopoly, to charge our people for their electric consumption,” the court said.
The ruling was penned by Justice Reynato S. Puno, and concurred with by all four other members of the Supreme Court’s Third Division — Associate Justices Artemio Panganiban, Angelina Sandoval-Gutierrez, Renato Corona and Conchita Carpio-Morales.
Meralco lawyers on Thursday warned that a refund could create havoc on the company’s already problematic finances which could adversely affect its service.
Meralco supplies the power needs of the Philippine capital and neighboring provinces where major industries are located.
“It bears stressing that even without this refund, Meralco is already confronting difficulties in satisfying the budget requirements for the improvement of its power system,” according to a 20-page motion filed in the Supreme Court by the firm’s lawyers.
“Prospects of an economic recovery may be thwarted by failure of Meralco to provide the quality of electric service needed to power the industries and commercial establishments it serves,” it added.
Presidential spokesman Rigoberto Tiglao dismissed Meralco’s “bleak economic scenario” as a mere attempt to influence the court’s decision.
“Meralco is (just) one of the country’s many electricity distribution companies,” he said in a statement. “There is no doubt at all that our financial system and our national electricity infrastructure will weather the problems of one corporation.”
Astro del Castillo, director for the Association of Securities Analysts of the Philippines, said while the ruling has an effect on the stock market, it should also be viewed favorably on the part of Meralco customers and investors in general.
“I think most businessmen and investors would welcome the news, since it shows there’s a level playing field in the country and that the court ruled based on the merits of the case and the laws of the land,” del Castillo said.
“Basically, the Supreme Court said the company violated the law and it will have to compensate its consumers,” he added.
