MAGNA CARTA FOR

RESIDENTIAL ELECTRICITY CONSUMERS

Pursuant to the provisions of Section 41 of Republic Act No. 9136, otherwise known as
the Electric Power Industry Reform Act, the Energy Regulatory Commission hereby
promulgates the Magna Carta for Residential Electricity Consumers as adopted in a Resolution
by the Commission on June 9, 2004.

CHAPTER 1. GENERAL PROVISIONS

Articles 1. Title – This Resolution shall be known as the Magna Carta for Residential
Electricity Consumers.

Article 2. Definition of Terms –

a) Bill Deposit shall mean the deposit required from customers by distribution utilities
of new and/or additional service and from disconnected consumers who were
previously not subject to bill deposit. The deposit shall be equivalent to the
estimated billing for one month to guarantee payment of bills;

b) Billing Adjustment shall mean the amount charged to the consumer for the unbilled
electricity consumed resulting from a stoppage or defect, conspicuous or otherwise,
in the meter, provided that there is no evidence of tampering thereon;

c) Connection Point shall mean, for the purposes of the Magna Carta, the point of
connection of the user system or equipment to the distribution system (for users of
the distribution system). or to the grid (for users of the grid) For purposes of this
definition, user system or equipment does not include the service entrance up to the
meter;

d) Consumer or Customer or End-user shall mean any person who is the registered
customer of the electric utility being supplied with electricity by the concerned
distribution utility or any person authorized by the registered customer to occupy
the premises and enjoy electric service;;

e) Distribution Utility shall mean any electric cooperative, private corporation,

government-owned utility or existing local government unit which has an exclusive
franchise or is authorized by law to distribute electricity to end-users;

f) Differential Billing shall mean the amount charged to the consumer for the unbilled
electricity illegal consumed as determined through the use of methodologies
prescribed by law. It is determined by multiplying the unbilled consumption in kWh,
the period covered and the current rate of electricity at the time of the
apprehension;

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g) Energy Regulatory Commission or Commission or ERC shall mean the independent
regulatory agency created under Republic Act No. 9136, otherwise known as the
Electric Power Industry Reform Act of 2001 (EPIRA);

h) Month shall mean the elapsed time between two succeeding meter readings, at
least twenty-eight (28) days apart but not to exceed thirty one (31) days;

i) An Officer of the Law shall refer to any person who, by direct provision of law or by
election or by appointment by competent authority, is charged with the
maintenance of public order and the protection and security of life and property,
such as barangay captain/chairman, barangay councilman, barangay leader, officer
or member of Barangay Community Brigades, barangay policeman, PNP
policeman, municipal councilor, municipal mayor and provincial fiscal;

j) A Registered Customer shall mean the customer who has a valid service contract
with the electric distribution utility;

k) Residential consumer shall mean a customer classified as such in the distribution

utility’s rate schedule as approved by the ERC.

l) Retirement of Electric Service shall mean the removal of all facilities necessary for
the provision of electric service, such as, but not limited to service drop wire, meter
base, wattmeter and other accessories of the service entrance and metering facilities

k)m) Termination of Electric Service Contract shall mean cancellation, for reasons
enumerated in Article 37, of the electric service contract whereby the distribution
utility and the registered consumer are released from their respective obligations in
the contract, without prejudice to the performance of existing obligations prior to
termination.

Article 3. Applicability. – This Magna Carta shall only apply to residential consumers.

Article 4. Basic Rights. – All consumers shall be entitled to the following basic rights:

(a) To have quality, reliable, affordable, safe, and regular supply of electric power;

(b) To be accorded courteous, prompt and non-discriminatory service by the electric

service provider;

(c) To be given a transparent, non-discriminatory and reasonable price of

electricity consistent with the provisions of RA 9136;

(d) To be an informed electric consumer and given adequate access to information on

matters affecting the electric service of the consumer concerned;

(e) To be accorded prompt and speedy resolution of complaints by both the distribution
utility and/or the ERC;

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 (f) To know and choose the electric service retailer upon the implementation of Retail
Competition; and

(g) To organize themselves as a consumer organization in the franchise area where

they belong and where they are served by the distribution utility or as a network
of organizations.

Article 5. Basic Obligations. – Every consumer must comply with the following
obligations and responsibilities:

(a) To observe the terms of his contract including, among other things, paying monthly
electricity bills promptly and honestly;

(b) To allow the faithful and accurate recording of consumption to be reflected in the
appropriate device;

(c) To allow the utility’s employees/representatives entry/access to his premises for

the purposes provided for in Article 29 hereof;

(d) To take proper care of metering or other equipment that the electric utility has
installed in his premises;

(e) To inform the distribution utility and/or proper authorities of any theft or
pilferage of electricity or any damage caused by any person to the electric meter
and equipment appurtenant thereto; and

(f) To cooperate with and support programs on the wise and efficient use of electricity.

CHAPTER II. CONSUMER RIGHTS

Article 6. Right to Electric Service. – A consumer has the right to be connected to a

distribution utility for electric power service after the consumer’s full compliance with the
distribution utility’s and local government unit’s (LGU) requirements set forth herein and that
of all existing laws, rules and regulations.

All applicants for electric service must subit a written application with the following
supporting documents:

A. For Owners

 Valid Identification
 Proof of Ownership
 Barangay Clearance or Certification showing proof of residency in the barangay
 List of Loads

B. For Successors
 Valid Identification
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  Proof of Succession to the Property
 Barangay Clearance or Certification showing proof of residency in the barangay
 List of Loads

C. For Authorized Representative of Owners

 Valid Identification
 Notarized Authorization from the Owner of the Property
 Barangay Clearance or Certification showing proof of residency in the barangay
 List of Loads

D. For Tenants of Privately-Owned Premises

 Valid Identification
 Contract of Lease or any notarized authorization from the owner showing the
right to occupy the premises sought to be energized
 Barangay Clearance or Certification showing proof of residency in the barangay
 Undertaking from the owner of the property
 List of Loads

E. Informal Settlers of Government-Owned Properties

 Valid Identification
 Proof of right to occupy the premises sought to be energized from the concerned
local government unit or government agency
 Barangay Clearance or Certification showing proof of residency in the barangay
 List of Loads

If the said consumer applicant is not the owner of the premises a tenant of the premises
sought to be energized, he must submit an undertaking executed by the owner of the
premises stating that, once the applicant leaves the premises, the owner shall be jointly and
severally liable for any unpaid regular monthly bills incurred by the applicant, but not to
exceed two(2) months, after applying the bill deposit. The unpaid regular monthly deposit
shall include the current bill. shall be required to submit an undertaking from the owner of
the premises that the said owner shall be jointly and severally liable with the applicant for
any unpaid regular monthly bills incurred by the applicant after leaving the premises, in the
absence of or insufficiency of the bill deposit.

The requirement of an undertaking shall not apply to an applicant who is a buyer of a

mass-housing unit, which is sought to be energized but remains owned by the mass-housing
developer. However, the applicant must show proof that the subject housing unit is still part of
the inventory of the said developer, and he/she is still currently paying the amortization
necessary to gain full ownership over the housing unit/premises.

When the aforementioned registered customer leaves the premises, the DU is given the
following options:

a) Terminate, after due notice, the contract of electric service; or

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 b) Change, after due notice, the registered consumer, from the tenant who was the
registered costumer to the owner of the property, unless the said owner submits,
within thirty (30) days from receipt of such notice, the name of another
person/tenant who will become the new registered consumer instead of the owner
of the property.

The liability provided in the undertaking shall extend to similar obligations or another
person/tenant allowed by the owner to occupy the premises without the knowledge of the
DU. The undertaking under paragraph (D) shall likewise state this obligation. The new
person/tenant will be required to pay all electric bills incurred during his period of stay in the
premises.

The DU may waive any or all of the foregoing requirement as it deems proper.

Subject to the approval of ERC, a distribution utility which cannot service areas within its
franchise territory may allow another distribution utility or a qualified third party (QTP) to
provide electricity services in said area pursuant to Rule 7 and Rule 14 of the Implementing
Rules and Regulations of the EPIRA.

The labor cost for connecting the distribution utility’s service drop to the connection
point shall be free of charge. The connection point shall be designated upon agreement by the
distribution utility and the consumer.

The applicant or the owner of the property must not also have any outstanding
obligations including surcharges whenever applicable, with the concerned distribution
utility.

Article 7. Right to a Refund of Bill Deposits. – The bill deposit provided for under Article
28 hereof shall be refunded within one month from the termination of service provided all bills
have been paid.

A customer who has paid his electric bills on or before its due date for three (3)
consecutive years may, however, demand for the full refund of the deposit even prior to the
termination of his service. An application for this purpose shall be filed with the concerned
distribution utility which must refund the deposit within one month from receipt of such
application.

Article 8. Exemption from Payment of Meter Deposits. – All consumers shall be exempt
from payment of meter deposits since private distribution utilities have incorporated the cost
of these electric watthour meters in their rate base. Electric cooperatives shall use their
respective Reinvestment Funds to procure electric watthour meters for their consumers.

In cases of loss and/or damage to the electric meter due to the fault of the customer, he
shall bear the replacement cost of the meter.

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 Article 9. Right to an Accurate Electric Watthour Meter; Determination of Average
Error. - No meter, including instrument transformers, shall be installed or placed in service
unless it has been tested, certified and sealed by the ERC. All watt-hour meters regardless of
make and type before being placed in service must be adjusted to as close as possible to the
condition of zero error.

The method provided in the Standard Rules and Regulations Governing the Operation of
Electric Power Services (ERB Resolution 95-21, as amended) shall be used in the determination
of average error.

The DU must install a meter of the proper type and classification compatible with the
electrical system/network in use in the premises of the consumer. For errors arising
therefrom, the liability of the consumer shall be limited in accordance with the provision
hereof.

An accurate electric meter, located in an area allowed under existing ERC Rules and
Regulations, policies and guidelines, is presumed to register the correct consumption of the
registered consumer or user. The entire bill must be paid within the prescribed period/s,
unless otherwise provided in the Magna Carta.

The ERC seal is a warranty that (1) the meter is accuratean acceptable or accepted type
and (2) that it operates within the allowable limits of tolerance.

The consumer has a right to demand the production of the meter test report
containing the findings of the authorized person who tested the said meter.

Article 10. Right to a Refund of Overbillings. – The customer has the right to a refund in
cases of overbilling by the distribution utility arising from a meter testing showing that the said
meter was fast without any evidence of tampering. In the event that a meter in service is
found to have an average error of more than the tolerance of plus two percent, the customer
is entitled to a refund, for a maximum period of six (6) months prior to the date of discovery,
to be applied to the customer’s future billings.

In cases of other billing erros where there are overpayments, refunds shall be computed
back to the date of the error or omission commenced. The consumer must be informed in
writing that, if he/she disagrees with the amount of the refund, the said consumer can
contest the refund before the ERC.

This provision shall likewise be applicable to errors arising under Article 9, Paragraph 2
of the Magna Carta.

Article 11. Right to a Properly Installed Meter. – The customer has the right to a meter
installed in a clean place free of vibration and where it will be easily accessible and visible for
reading and testing by both the distribution utility and the consumer. Under no condition
should meters be located behind doors or where they can be easily broken or jarred by
moving furnitures or equipment. Meters shall be located on the outside wall of the building or
private pole and shall not be more than three (3) meters nor less than 1.52 meters mounting
height from the surface on which one would stand to repair or inspect the meter.
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 Meters may be located in other areas based on justifiable reasons. Meters located in
elevated metering centers shall be governed by the rules to govern the installation and
relocation of residential electric meters by DU to elevated metering centers or individual
residential electric meter to other elevated service.

Clustering of meters may be allowed under any of the following circumstances:

1. Upon the request of a consumer;
2. When there is not right of way; or
3. In areas with high incidence of electricity pilferages.

The DU shall bear the cost of the wire extending from the meter to the actual premises
of the consumer, except when the consumer request for the clustering, and in such case, the
said consumer shall bear the aforementioned costs.

Meters may likewise be clustered or relocated in elevated metering cluster upon the
request of the concerned government agency or local government unit.

A customer shall bear the cost of relocation of his electric watthour meter under
the following circumstances:

1. The customer requests for the relocation of his electric watthour meter, for
reasons other than those provided for in the first paragraph; or

2. The meter installation fails to meet the conditions under the first paragraph
resulting from improvements done on the customer’s premises, thereby
necessitating such relocation. The DU must inform the consumer in writing of the
latter’s non-compliance with the proper meter installation conditions.

2. If the consumer fails, within thirty (30) days from receipt of the notice of non-
compliance, to coordinate with the DU regarding the relocation of the meter/s, the
DU shall have the right to relocate the said meters without further notice. The
consumer shall be responsible for all the cost and expenses incurred as the result of
his/her non-compliance. The parties may enter into an arrangement for the payment
of the aforementioned costs. In case the consumer refuses, without any justifiable
reason, to allow DU representatives’ entry into the premises to effect the relocation,
the DU may disconnect the electric service of the consumer after a forty-eight
written notice.

All other relocations of the meter shall be borne by the electric utility.

Article 12. Right to a Meter Testing by Electric Utility and/or ERC. – A customer has the
right to require the distribution utility to test, once every two (2) years, free of charge, the
accuracy of the meter installed in his/her premises making use of a meter standard duly tested
and sealed by the ERC, unless the meter has been the subject of testing in accordance with the
rules and procedures for the test and maintenance of electric meters by the DU.

If the customer requests for meter testing more than once every two years and the
meter being tested is found to be within the tolerable limit as provided for in Article 9 hereof,
the utility may assess the customer a testing fee based on the testing fee charged by ERC.

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 A written report showing the result of such test shall be furnished the customer.

The customer may also request the ERC to conduct a meter test, subject to the payment
of a fee prescribed under the approved ERC Schedule of Fees and Charges.

In case the meter is found to be inaccurate, the customer may demand the replacement
of the said meter or have the ERC calibrate the said meter to restore its accuracy closest to the
condition of zero (0) error. The provision on refund or billing adjustment due to inaccurate
meters shall apply as appropriate.

Article 13. Right to a Prompt Investigation of Complaints; Customer Dealings. –

Distribution utilities shall record and promptly investigate all complaints referred to them
concerning their services.

The distribution utility must furnish the complainant a report of the action/s taken
thereon within the period stated in the distribution utility’s Compliance Plan as provided for in
the Philippine Distribution Code. In the absence of such plan, the report must be made within
fifteen (15) days from receipt of the complaint.

In case of disagreement between the distribution utility and the customer, the latter
may file a complaint with the ERC in accordance with Article 27 of this Magna Carta.

In dealing with their customers relative to electric power services, all officers,
employees and agents of distribution utilities must properly and conspicuously display their
identification cards at all times.

Article 14. Right to Extension of Lines and Facilities. – A consumer located within thirty
(30) meters from the distribution utilities’ existing secondary low voltage lines, has the right to
an extension of lines or installation of additional facilities, other than a service drop, at the
expense of the utility inasmuch as said assets will eventually form part of the rate base of the
private distribution utilities, or will be sourced from the reinvestment funds of the electric
cooperatives. However, if a prospective customer is beyond the said distance, or his demand
load requires that the utility extend lines and facilities, the customer may initially fund the
necessary expenditures.

To recover his aforementioned expenditures, the customer or developer may either

demand the issuance of any financial instruments mutually acceptable to the parties or a
refund at the rate of seventy-five percent (75%) of the gross distribution revenue derived from
all consumers connected to the line extension for the calendar year until such amounts are
fully refunded, or if the DU is a private corporation, the purchase of preferred shares, if
available, subject to the approval of SEC on the issuance of such shares or other financial
instruments mutually acceptable to the parties. The preferred shares shall be redeemable by
the DU within a period of fifteen (15) years. Revenues derived from additional consumers
tapped directly to the poles and facilities so extended shall be considered in determining the
revenues derived from the extension of facilities.the customer may either demand the
issuance of a notes payable from the distribution utility or refund at the rate of twenty-five

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(25) percent of the gross distribution revenue derived for the calendar year, or, if available,
the purchase of preferred shares.

Revenue derived from additional customers tapped directly to the poles and facilities so
extended shall be considered in determining the revenues derived from the extension of
facilities.

The parties may agree to accelerate the refund of the cash advance under mutually
acceptable terms provided it will not result in any form of cross-subsidies. Only the refunded
amount shall form part of the DU’s regulatory asset base or plant in service.

Dedicated transformers, including their maintenance, repair or replacement, for the

sole and exclusive use of the consumer, shall be at the expense of the said consumer.

Maintenance of the lines and facilities shall be at the expense of the DU.

Refund of advances made by developers shall be governed by the provision of the

Distribution Services and Open Access Rules (DSOAR), as amended.

When a developer initially paid the cost of the extension of lines to provide electric
service to a specific property and incorporated these expenses in the cost thereof, and that
property was purchased and transferred in the name of the registered customer, the latter,
through the developer, shall be entitled to the refund of the cost of the extension of lines, and
exercise the options for refund provided in this article.

If the cost of the extension of lines or installation of additional facilities was funded
gratuitously by other persons for the benefit of the customer, this provision shall not apply

In this connection, all concerned utilities shall furnish the Commission a semi-
annual report of the names of customers who made the aforementioned cash advances, the
amount of the cash advance and the mode of refund.

Article 15. Right to Information; Scheduled Power Interruptions. – In order to

increase consumer awareness, all offices of distribution utilities must provide a Consumer
Bulletin Board where major announcements/documents issued affecting consumers will be
posted. Furthermore, they must establish communications facilities, including but not limited
to a customer hotline and Short Messaging Service (SMS), to cater exclusively to their
customers. Major announcements/documents shall include, but not be limited to, rate
schedules and any changes thereon; other service charges; terms and conditions of service;
standard rules and regulations governing the operation of distribution utilities; general
information on metering, including but not limited to the manner in which meters are read
and description of method used in reading; decisions and orders of the ERC.

When there are two or more authorized schedules of rates applicable to a

customer, the distribution utility should accordingly advise said customer in writing and
apply the rates which are most beneficial to the customer.

At least two (2) days before a scheduled power interruption, a distribution utility must
announce the same to its customers through print, or other mass or interactive media. In
remote areas where such media are inaccessible, the distribution utility must set up a Bulletin
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Board where announcements of scheduled power interruptions will be posted in an area that
could easily be seen by its customers, preferably along roadsides or in front of the entrance to
the City/Municipal Hall or Public Market.

Article 16. Right to a Transparent Billing. – Bills to service customers shall conform with
the format as approved by the ERC. The current formats approved by the Commission are
shown in Annexes A and B of this Magna Carta.

Article 17. Right to a Monthly Electricity Bill. – Bills shall be delivered monthly to the
customer by the distribution utility in accordance with the applicable rate schedule. Said
bills shall be payable to authorized collectors, the collection office, authorized agents/entities
or at its authorized banks.

Notwithstanding the provisions of the foregoing paragraph, no violation of the

provisions of this Magna Carta is committed by the distribution utility in reading its customers’
meters beyond the maximum allowable time provided for in Article 2(h), Provided that such
inability to read on time was due to a fortuitous event and, that the meter reading is done
immediately after the said fortuitous event ceases to exist.

Should the period covered in the electric bill exceed the number of days provided for in
this Magna Carta, the distribution utility shall nevertheless provide the applicable subsidy for
that consumption level due to the customer as if the meter had been read within the
maximum allowable period.

The distribution utility shall safely keep the duplicate, electronic or otherwise, or office
stub of the bills used and shall not be destroyed within five (5) years without authority from
the Commission.

Article 18. Right to Due Process Prior to Disconnection of Electric Service. – No

consumer shall be deprived of electric service without due process of law.

Subject to the foregoing paragraph, disconnection of electric service shall only be made
under the following circumstances:

(a) Non-payment of electric bills within the period of time provided in Article 32
of this Magna Carta;

(b) Illegal use of electricity under Republic Act No. 7832, otherwise known as the
Anti-Electricity Pilferage Law;

(c) Upon lawful orders of government agencies and/or the courts;

(d) When the public safety so requires;

(e) Request of the registered customers based on justifiable reasons; or

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 (f) Allowing other end-users or persons to be connected to his electrical installation,
whether for profit or not.

(g) Refusal, without any justifiable reason, of the consumer to allow DU

representative’s entry into the premises to relocate the electric meter.
Disconnection may be effected after the lapse of a 48-hour notice issued by the
DU to that effect;

(h) Failure to adhere to the payment scheme for the recovery by the DU of the cost
of relocation of meter/s. Disconnection may be effected after the lapse of a thirty
(30)- day notice issued by the DU to that effect;

(i) Failure to pay the required bill deposits, reimposed, adjusted or otherwise;

Whenever a DU disconnects a consumer’s electric service, it may opt to retire the

electrical facilities immediately, provided, however that if the electric service remains
disconnected for a period of thirty (30) days, retirement of facilities shall become mandatory,
unless the electric service was disconnected at the disconnection point.

(f) Retirement of said facilities is not tantamount to the termination of the contract of
electric service of the said consumer.

Article 19. Right to a Notice Prior to Disconnection. – For disconnections due to non-
payment of electric bills, a written notice must have been served to the customer forty eight
(48)-hours before such disconnection. The distribution utility may discontinue the service
notwithstanding the existence of the customer’s bill deposit with the distribution utility which
will serve as guarantee for the payment of future bill(s) after service is reconnected.

When the owner/occupant of the house or establishment concerned or someone

acting in his behalf shall have been caught in flagrante delicto doing any of the acts
enumerated in Section 6 of RA 7832, the distribution utility concerned shall have the authority
and right to disconnect immediately his electric service after serving the written notice or
warning to the effect. The written notice or warning being referred to herein shall be served
prior to such disconnection and shall indicate the name and address of the consumer,
consumer account number, date of apprehension, findings of fact, amount of energy
pilfered in kilowatt-hour, the amount representing the differential billing and the method used
in computing the differential billing.

Article 20. Right to Suspension of Disconnection.– Notwithstanding the service of

notice but subject to the provisions of RA 7832, disconnections of service shall not be made on
any week day beyond three o’clock (3:00 P.M.) in the afternoon, Saturdays, Sundays and
official holidays, and under the following or any other similar circumstances:

(a) One of the permanent occupants is sick and dependent on a life support system
requiring electricity; Provided, That the customer can present a medical
certificate issued by a duly licensed physician or public health official certifying
that the termination of the electric service would be especially dangerous to
the health of the said person;
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 (b) During the funeral wake of a deceased permanent resident of the premises;
Provided, That the consumer can present a duly certified true copy of the death
certificate of the deceased issued by the Local Civil Registry of the city or
municipality concerned;

(c) Customer indubitably proves he did not receive a Statement of Account

and/or Disconnection Notice;

(d) Customer is being billed in a single statement for consumption covering

several months due to the failure of the utility to issue a timely monthly billing
statement to the consumer;

(e) Customer or his representative is not around; Provided however, that this shall
not be applicable to disconnections due to non-payment of electric bills.Filing of a
complaint with ERC for cases involving differential billings, billing adjustments
arising from defective or stop meters or other billing errors, and estimated
consumptions until the complaints’ final resolution;

(e)(f) Filing of a compliant with ERC for high billing upon posting of a bond equivalent to
the complainants average 12-month consumption prior to the billing in question

For Item (a), the suspension of the disconnection shall only be made during the
dependency of the patient on the life support system which shall not exceed two months from
such suspension.

For Item (b), the suspension of the disconnection shall only be made during the period
of the wake which shall not exceed one month from the suspension or until the interment,
whichever comes earlier.

For Item (c), the non-receipt should not be caused by the refusal of the customer to
accept such electric bill or notice.

With respect to Item (d), the customer must pay the current billing on its due date. The
distribution utility, however, must enter into an agreement with the customer for a staggered
payment scheme within a period equivalent to the number of months covering the unpaid
billings.

With respect to item (e), the suspension of disconnection shall take effect upon receipt
of the DU of the order from the ERC, until its final resolution. The suspension of disconnection
shall only apply to non-payment of the billings in question. The consumer shall, however
continue to pay his/her regular monthly bills, and non-payment thereof may be a ground for
disconnection of electric service pursuant to paragraph (a) hereof.

Article 21. Right to Tender Payment at the Point of Disconnection; Deposit

Representing the Differential Billing. – If at the time the disconnection is to be made, the
customer tenders payment of the unpaid bill to the agent or employee of the distribution
utility who is to effect the disconnection, the said agent, or employee of the distribution utility
shall desist from disconnecting the service to allow the customer to pay his bills within twenty-
four (24) hours;

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 Provided however, That the customer can only invoke this provision once for the same
unpaid bill.

The utility concerned shall not immediately disconnect or shall immediately restore the
electric service of the customer upon the deposit by the customer with the utility or with
the competent court, as the case may be, of the amount representing the differential billing.

Article 22. Right to Electric Service Despite Arrearages of Previous Tenant. – Without
prejudice to enforcing the provisions of the second paragraph of Article 6 hereof, a
distribution utility shall not refuse or discontinue service to an applicant or customer, who is
not in arrears to the distribution utility, even though there are unpaid bills or charges due from
the premises occupied by the applicant, or customer, on account of an unpaid bill of a prior
tenant, unless there is evidence of conspiracy to defraud the distribution utility. Conspiracy
shall not be presumed but must be supported by substantial evidence of the part of the DU.

Article 23. Right to Reconnection of Electric Service. – Whenever the electric service is
disconnected due to non-payment of electric bills, the utility must immediately reconnect the
same within the period provided in the utility’s Compliance Plan as approved by the
Commission in accordance with the Philippine Distribution Code, but in no case shall exceed
twenty-four (24) hours from payment of the said arrearages by the customer. The 24-hour
period may be extended only for justifiable reasons.

Whenever a DU disconnects the consumer’s electric service due to non-payment of

billings which is the subject matter of a complaint pending with the ERC and a stay of
disconnection, relative to such unpaid billing, has been issued in favour of the complainant
under Article 20, paragraph (e) hereof, the DU shall immediately reconnect the same within
the aforementioned time period.

Article 24. Right to Witness Apprehension. – Subject to the provisions of RA 7832, all
apprehensions for illegal use of electricity must be personally witnessed by the customer or
occupant or someone of suitable age and discretion residing therein and acting in behalf of the
owner or occupant of the premises, and by an officer of the law or by an ERC representative.

Article 25. Right to ERC Testing of Apprehended Meter. – In case the apprehension is
witnessed by an officer of the law and not by an ERC authorized representative, the electric
meter subject of the offense must be placed in a suitable container, properly identified and
sealed, and shall be opened only for testing by the ERC’s duly authorized representative.

Upon removal, the apprehended meter shall be immediately replaced by the

distribution utility with an accurate electric watthour meter. However, no disconnection of
electric service shall be effected until the ERC issues a meter test report showing that the
meter was indeed tampered.

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 Article 26. Right to Payment Under Protest. – In cases of regular electric bills or billing
adjustments due to the stoppage or failure of the meter to register the full and correct
amount of energy consumed, or for differential billing due to alleged illegal use of
electricity, the consumer shall have the right to pay under protest for purposes of continuous
supply of electricity by the utility without prejudice to a complaint to be filed by such
customer against the imposition of the bill or billing adjustment or differential billing. Such
payment shall not be construed as an admission by the consumer of the allegations or claims
of the distribution utility or of any violation of law or of the contract with the distribution
utility.

A protest, other than for high billing, shall be made in writing to the DU within fifteen
(15) days from payment of the protested amount. In case the consumer disagrees with the
resolution of the protest, he may file a complaint with the ERC.

Protests for high billings shall be governed by Article 32 of the Magna Carta.

Article 27. Right to File Complaints before ERC . – Every consumer has the right to file a
complaint before the ERC for violation of ERC laws, rules, regulations, guidelines and policies,
including but not limited to RA 9136 and its Implementing Rules and Regulations, RA 7832 and
its Implementing Rules and Regulations and ERB Resolution No. 95-21, as amended; Provided,
That the complainant has previously discussed/consulted the issue with the Consumer Welfare
Desk (CWD) Officer or representative of the concerned distribution utility and no settlement
has been reached.

CHAPTER III. CONSUMER OBLIGATIONS

Article 28. Obligation to Pay Bill Deposit. – A bill deposit from all residential customers
to guarantee payment of bills shall may be required of new and/or additional service.

The amount of the bill deposit shall be equivalent to the estimated billing for one
month based on the load schedule submitted by the consumer. Provided that aAfter one (1)
year and every year thereafter, whenever the actual average monthly bills are more or less
than ten percent (10%0 of the initial bill deposit, such deposit shall be correspondingly
increased/decreased to approximate said billing.

Distribution utilities shall pay interest on cash bill deposits equivalent to the interest
incorporated in the calculation of their Weighted Average Cost of Capital (WACC),
otherwise the bill deposit shall earn an interest per annum in accordance with the prevailing
interest rate for savings deposit as approved by the Bangko Sentral ng Pilipinas (BSP) peso
savings account interest rate of the Land Bank of the Philippines on the first working day of the
year, or other government banks subject to the approval of ERC. The interests shall be
credited yearly to the bills of the registered customer.

DU are allowed to provide alternatives to cash deposits as a guarantee of consumer’s

payments.

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 In cases where the customer has previously received the refund of his bill deposit
pursuant to Article 7, and later defaults in the payment of his monthly bills, the customer shall
be required to post another bill deposit with the distribution utility and lose his right to avail of
the right to refund his bill deposit in the future until termination of service.

Failure to pay the required bill deposit shall be a ground for disconnection of electric
service. Non-payment of the reimposed or adjusted bill deposit shall be a ground for
disconnection of electric service.

When the electric service of a consumer is disconnected and no bill deposit was ever
posted for such service account, the consumer may be required, in addition to the payment of
the unpaid bills, to post the appropriate bill deposit with the concerned DU, before any
reconnection of electric service can be effected.

Article 29. Obligation to Allow Inspection, Installation & Removal of Electricity

Apparatus – Customers shall allow the employees and/or representatives of the
distribution utility to enter their premises for the purpose of inspecting, installing, reading,
testing, repairing, maintaining, removing, replacing, or otherwise disposing of its apparatus
and property, and/or removing the distribution utility’s entire property in the event of the
termination of the electricity service contract; and for disconnection of service for non-
payment of bills or violation of contract (VOC).

Provided, however, that only authorized employees and/or representatives of the

distribution utility with proper identification cards shall be allowed to make any external
adjustments of any meter or any internal or external adjustments of any other pieces of
apparatus owned by the distribution utility.

Article 30. Obligation to Allow the Construction of Poles, Lines & Circuits. –Consumers
shall allow the distribution utility, if necessary, to construct its poles, lines and circuits and to
place its transformers, apparatus on their property or within the buildings of the consumer, at
a point or points convenient for such purpose.

The customer shall allow the distribution utility to use a suitable space for the
installation of necessary metering equipment in order that such equipment will be protected
from damage by the elements, or through the negligence or deliberate acts of any person or
persons.

Article 31. Obligation to Receive Monthly Bills. – Consumers must accept their electric
bills, without prejudice to the exercise of their right to pay under protest pursuant to Article 26
of this Magna Carta in order to contest the same.

Article 32. Obligation to Pay Monthly Electric Bills. – Consumers must pay their bills
not later than nine (9) days after receipt of the monthly bill.

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A. Monthly Electric Bills –

Consumers must pay their bills not later than nine (9) days after receipt of the
monthly bill. The bill must be based on consumption registered by their accurate
electric meters. The said bills shall be conclusive between the parties, without
prejudice to the rights and obligations of either party under any of the provisions of
the Magna Carta.

DU may offer other payment options to the consumer under terms mutually
acceptable to both parties.

B. High Billings –

Consumers are allowed to contest all instances of high billing even if the entire
amount of the bill has already been paid. High billing occurs when the consumer’s
one-month kilowatthour consumption exceeds one hundred percent (100%) of
his/her average 12-month kilowatthour consumption prior to the contested bill.
Within sixty (60) days from payment thereof, the consumer must lodge a formal
protest with the DU, accompanied by proof why he/she should not be liable for the
entire bill.

To stay the disconnection of service, the consumer shall be allowed to pay an

amount equivalent to the said average 12-month consumption subject to adjustment
upon resolution of the complaint.

The DU shall, upon receipt of the complaint/protest, conduct an investigation

thereof. Investigation into high billing complaints must be completed within thirty
(30) days from filing of the complaint or protest.

The consumer must cooperate with the DU and its representatives throughout
the investigation process including the conduct of a thorough inspection of his/her
premises, the electric meter and electrical wirings. All cost relative to the
investigation and inspection shall be shouldered by the consumer. All inspections
shall be done in the presence of the consumer or his/her duly authorized
representatives.

After the inspection and investigation, the DU shall issue a written resolution
of the complaint stating the reasons therefor.

The ERC will only entertain a complaint for high billing if it is accompanied by a
certification from the concerned DU or any other proof that both parties have
exhausted all avenues to resolve the same but to no avail.

However, for cases other than inaccurate or tampered meter, tapping of

loadside wire, or stoppage or failure of meter to register the actual consumption of
the customer or other billing errors contemplated in Article 10 hereof, where there is
unexplained and sudden increase in consumption resulting in high billing equivalent
to at least 500% of the customer’s previous average 12-month consumption, the DU
shall be entitled to collect from the customer the amount equal to his average 12-
month consumption prior to the contested billing, plus half of the difference
between the bill in question and the said average 12-month consumption; provided,
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 that, if the customer is unable to justify his her claim for high billing within a three-
month period from date of the contested billing or the increase in consumption has
been sufficiently established by the DU within the same period, or the customer’s
subsequent consumption for any month in the succeeding twelve (12) months
approximates the contested billing, the customer shall be required to pay the entire
amount of the contested billing. The DU must, however, change the meter of the
concerned consumer immediately after occurrence of the contested billing.

If the entire bill has been previously paid, the overpayment shall be credited to
the future billings, otherwise, the consumer shall pay the remainder.

Article 33. Obligation to Pay Billing Adjustments. – A consumer may be compelled to

pay a billing adjustment in case there is a stoppage or failure by the customer’s meter to
register the full amount of energy consumed without any fault on the part of the customer.

In the event that a meter in service is found to have an average error of more than the
tolerance of minus two percent (2%) without any evidence of tampering by the customer, the
utility may ask for payment of a billing adjustment from its customers of the unregistered
consumption. If the said electric meter was merely found to be defective and has not
completely stopped, and such defect could not be easily detected by the concerned customer,
the distribution utility may only be allowed to recover the unregistered consumption for a
maximum period of six (6) months prior to the discovery of the defect. In cases where there is
actual stoppage or any conspicuous defect of the said meter, the distribution utility may only
be allowed to recover the unregistered consumption for a maximum period of three (3)
months prior to such discovery of the stoppage.

Notwithstanding the preceding paragraphs, the distribution utility may recover the
full amount of the unregistered consumption if it has been complying with the two-year meter
testing requirement under the Implementing Rules and Regulations of RA 7832, otherwise
known as the Anti-Electricity Pilferage Act; Provided however, that the recovery period should
not go beyond the period from the last testing of the meter prior to the date of discovery, but
which period shall not exceed two (2) years. The distribution utility, however, must enter into
an agreement with the customer for a staggered payment scheme within a period equivalent
to at least the number of months covering the billing adjustment, unless the consumer opts to
accelerate the payment period.

The refund or billing adjustment should be based on the rate prevailing during the
period sought to be recovered, and the estimated consumption shall be based upon the result
of the ERC test on the affected meter during the time of discovery, or his average use of
energy for the immediately preceding six-month period of like use, or the lowest monthly
consumption within three (3) months after the time of discovery.

In case of disagreement on such bill, the Commission shall resolve the same.

Consumer shall pay undercharges to the DU upon showing proof of the latter’s
entitlement. The amount of the undercharge shall be computed back to the date the error
commenced. However if the error or omission resulted from conspicuous defects and/or other
billing errors due to the fault of the DU, recoverable period shall not exceed three (3) months;
thus, the DU will only be allowed to collect undercharges incurred for the three (3)-month
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period immediately preceding the date of discovery of such error or omission. This provision
shall likewise be applicable to errors arising under Article 9, paragraph 2 of the Magna Carta.

Article 34. Obligation not to Commit Illegal Use of Electricity. - No consumer is

allowed to perform acts constituting illegal use of electricity. The following circumstances
constitute prima facie evidence of illegal use of electricity:

(a) The presence of a bored hole on the glass cover of the electric meter, or at the back
or any part of said meter;

(b) The presence inside the electric meter of salt, sugar and other elements that
could result in the inaccurate registration of the meter’s internal parts to
prevent its accurate registration of consumption of electricity;

(c) The existence of any wiring connection which affects the normal operation or
registration of the electric meter;

(d) The presence of a tampered, broken, or fake seal on the meter, or mutilated, altered
or tampered meter recording chart or graph or computerized chart, graph or log;

(e) The presence in any part of a building or its premises which is subject to the control
of the consumer, or on the electric meter, of a current reversing transformer,
jumper, shorting and/or shunting wire, and/or loop connection or any other similar
device;

(f) The mutilation, alteration, reconnection, disconnection, bypassing or tampering of

instruments, transformers and accessories;

(g) The destruction of, or attempt to destroy, any integral accessory of the
metering device box which encases an electric meter, or its metering accessories.

(h) The acceptance of money and/or other valuable consideration by any officer or
employee of the electric utility concerned or the making of such an offer to any such
officer or employee for not reporting the presence of any of the circumstances
enumerated in subparagraphs (a), (b), (c), (d), (e), (f), or (g) hereof.

The discovery of any of the foregoing circumstances must be personally witnessed and
attested to by an officer of the law or a duly authorized representative of the Energy
Regulatory Commission.

Article 35. Obligation to Pay Differential Billing. – A consumer who is discovered to

have committed the offense of illegal use of electricity shall, in addition to the imposition
of appropriate penal sanction, be required to pay a differential billing to the electric
distribution utility to be computed in accordance with existing laws, rules and regulations.

The period to be recovered for the purpose of computing the differential billing shall be
subject to the following rules:

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 1. If prior to the date of discovery, there was a change of meter, change of seal or
reconnection, or replacement of parts, or it can be determined when an abrupt
or abnormal drop in consumption occurred, the period to be recovered for purposes
of the differential billing should be reckoned from the time when the said
changes, inspection or reconnection occurred, which may result in a less than a year
period of recovery.

2. Furthermore, if the concerned consumer presents indubitable and adequate proof

that the occurrence of the illegal use of electricity is for a period which could be less
than a year, then for purposes of calculating the differential billing, the recoverable
period shall start from the occurrence of the illegal use up to the time of
apprehension.

3. In the absence of the two aforementioned circumstances, the distribution utility

may be allowed to recover the differential billing up to a maximum of sixty (60)
billing months up to the time of discovery.

Article 36. Transfer of Electric Service. – Applications for transfer of electric service of
registered customer shall be allowed under the following circumstances:

(a) A new tenant shall be allowed to substitute as the new registered consumer when
the original registered customer was a tenant who has left the premises covered
by the electric service contract;

(b) In case of sale of the premises, the new owner of the premises shall be allowed to
apply for substitution if the registered consumers was the previous owner of the
premises; or

(c) If the DU discovers and proves that the registered consumer who is a tenant has
permanently left the premises, the owner of the said premises, upon due notice
by the distribution utility, shall be substituted as the new registered consumer,
unless the new occupant applies for transfer of electric service.

In support thereof, the applicant shall submit all applicable requirements provided for in
Article 6 hereof to the DU. Upon approval of the transfer of electric service, the new registered
consumer shall assume all rights and obligations of the old registered consumer.

Arrearages by the previous registered consumer or occupant shall be dealt with in

accordance with Article 22 of the Magna Carta.

Article 37. Termination of Electric Service. – Termination of electric service shall be

only effected, after giving due notice to the other party, for any of the following reasons:

(a) Request by the registered consumer;

(b) Death of the registered consumer;

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 (c) The electric service of the registered consumer has been disconnected due to
unpaid bills and the said service is not reconnected by the DU within a period of
three months from such disconnection;

(d) Permanent departure or abandonment by the registered consumer of the subject

premises;

(e) Public safety; and

(f) Orders of competent courts or other government agencies

CHAPTER IV. FINAL PROVISIONS

Article 3638. Implementation. – Implementation of Articles 7, 8 and 28 shall be subject

to Guidelines to be promulgated and approved by the Commission.

Article 3739. Violation. – A violation of any provision of this Magna Carta shall be
subject to penalty which the Commission, after giving the electric utility or consumer the
opportunity to be heard, may impose in accordance with law.

Article 3840. Separability Clause. – If any provision of this Code is declared

unconstitutional or invalid, the other provisions not affected thereby shall remain in force and
effect.

Article 3941. Repealing Clause. – Provisions of ERB Res. No. 95-21 as amended, rules,
regulations, guidelines and other issuances not expressly revised by this Magna Carta shall
remain in force and effect.

Article 4042. Effectivity. – This Code shall take effect fifteen (15) days after its
publication in a newspaper of general circulation in the country.

Pasig City, June 17, 2004.

Pasig City, November 15, 2010 (ERC Resolution No. 28 Series of 2010)

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