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Republic of the Philippines I $' ""<{hENERGY REGULATORY COMMISSION It Appro'l~d fo,r~

San Miguel Avenue, Pasig City P(J:;t1;:9!'WWW.CiLi.J.Ph I

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LUZVIMINDA VILLEGAS,Complainant,

-versus- ERC CASE NO. 2010-149CC

DECISION

Respondent.x--------------------------------------------x

MANILA ELECTRIC COMPANY(MERALCO),

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IBefore the Commission for resolution is the verified Complaint

filed on 16 June 2010 by Luzviminda Villegas against Manila Electric I'

Company (MERALCO), seeking relief from payment of the differentialbilling imposed by MERALCO due to complainant's alleged use of atampered meter. I

The instant Complaint stemmed from the following factualantecedents:

Complainant Luzviminda Villegas is a resident of 263-A PribadoSt., San Miguel, Manila, and an actual user of electricity distributed byMERALCO under Service Identification Number (SIN) number411648801 registered in the name of Primavera V. Mateo.'

I Complainant's Position Paper at p. 1.2 With Meter No. 33SWN34224,

On 13 April 2010, at around two o'ciock in the afternoon (2:00P.M.), the service inspection team of MERALCO conducted aninspection on the metering facility> of complainant. Before the conductof the inspection, MERALCO inspectors sought permission andinformed the complainant of their purpose. According to MERALCO,,the inspection was conducted in the presence ;ofthe complainant. I

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On that same day, a separate laboratory' test was conducted bythe Commission's meter technician, Engr. Vincent John G. Castro. Theindependent laboratory test showed that:

. .ERC Case No. 2010-149CCDecision I 13 June 2017Page 2 of 15

,In the course of the inspection, MERALCO discovered that Meter

No. 33SWN34224 bearing SIN number 411648801 showed indicationsthat it was tampered as the meter had dirt inside, and had to beremoved and replaced with a new meter (number 1098a139937).MERALCO inspectors also discovered that thel terminal seal of themeter was missing. They accomplished a Notice and a Meter andDevice Laboratory Test Request (MOLTR) to subject the meter to alaboratory examination to determine whether or not it was tampered.Complainant affixed her signature on the Notice and the MOLTR.

Subsequently, the alleged tampered meter was brought toMERALCO's Meter laboratory for testing. On 11 May 2010, Mr. LesterVelasco Pena, a Meter Technician of MERALCO, conducted thelaboratory test and confirmed or concluded that the meter wastampered due to the following findings:

(1) Cover seals 20 MMIP 1996 were tampered bypulling out from the sealing wire and I

. (2) The driving gear of the 2"d shaft was deliberatelyfiled causing it to disengage partially from the driven gearof the unit pointer when subjected to a dial test of 5000dial revolution. The meter registered only ;3kWh instead of18kWh as required for a normal or untampered meter.(sic)

I(1) Cover seal condition: Deformed I(2) Filed gear(3) Average accuracy 16.66% IOn 27 May 2010, complainant received I a formal demand letter I

from MERALCO apprising her of the results of the laboratory test andconfirming that her kWh meter was tampered. In the said letter, IMERALCO demanded from complainant the amount ofPhP765, 736.30 as differential billing, otherwise, her electric service Iwill be disconnected should she fail to p~y the said amount. Inaddition, MERALCO shall impose surcharges due to "Violation ofContract". Due to the tampered condition df the meter, it failed toregister the actual, correct and full electric co~sumption. Hence, basedon the billing history and actual load of complainant, MERALCO'computed the differential billing of PhP765, V36.30, representing thel

unregistered electricity consumption of the 60mplainant covering th~period from 01 June 2005 to 13 April 2010. I

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ERC Case No. 2010-149CCDecision /13 June 2017Page 3 of 15

Complainant insists that the claim of the respondent that sheviolated the pertinent provisions of Republic Act (RA) No, 7832 alsoknown as "An Act Penalizing the Pilferage of Electricity and Theft ofElectric Power Transmission Lines/Materials, Rationalizing SystemLoss by Phasing Out Pilferage Losses as a Component Thereof, andfor other Purposes" has no factual or legal basis,

On 16 June 2010, complainant filed a verified complaint againstthe respondent before the Commission,

Several pre-hearing conferences were conducted by theCommission to explore the possibility of an amicable settlementbetween the parties, These pre-hearing conferences, however, yieldednegative results, Hence, the complaint was set for formal hearings,

During the 26 January 2012 hearing, complainant was presentedas witness who testified in support of her complaint In the course ofher direct examination, several documents were identified by the saidwitness and duly marked in evidence as Exhibits "A" to "0", inclusive,

At the 2 August 2012 continuation of hearing, complainant andrespondent moved to apply the Commission's Rules on SummaryProcedure in resolving this complaint Said motion was granted, Theparties were then directed to file their respective position papers,

On 8 October 2012, complainant filed her "Position Paper" whilerespondent filed its "Position Paper for the Respondent" on 12 October2012, I

On 15 October 2012, the Commission issued an Order directing Icomplainant and respondent to file their respective draft decisions Ipursuant to Section 2,3 of Executive Order No, 26, Series of 1992,

IIn compliance therewith, respondent filed its "Draft Decision" on

16 November 2012, I I

On 5 August 2013, the Commission issued another Order Idenying the "Motion to Resolve the Case,,3 filed by respondent andldirecting complainant to file her draft decision within an extendibleperiod often (10) days from receipt thereof

On 13 September 2013, complainant filed a "Manifestation"stating, among others, that she filed her pos'ition paper on 2 Octobe I2012 and that her counsel was not furnishedl with a copy of the Orderdated 15 October 2012 directing them to file a draft decision,

I3 Filed on 20 June 2013

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4 Meter and Device Laboratory Test Request, Exhibit "5".5 Exhibit "12".6 Exhibit "13".7 Exhibits "16-30".

. . .ERC Case No. 2010-149CCDecision /13 June 2017Page 4 of 15

On 24 October 2013, an Order was issued giving complainant anextendible period of sixty (60) days from receipt thereof within which tofile her draft decision.

On 29 January 2014, complainant filed a "Draft Decision".

Taking into consideration the parties' respective positions,affidavits, and other submissions, the issues in this case can besummed up as follows:

ISSUE

WHETHER OR NOT COMPLAINANT ISLIABLE TO PAY THE DIFFERENTIALBILLING IMPOSED AGAINST HER. IN THEAMOUNT OF SEVEN HUNDRED SIXTY FIVETHOUSAND SEVEN HUNDRED THIRTY SIXAND 30/100 (PhP765,736.30).

DISCUSSION

Complainant insists that she could not have violated RepublicAct No. 7832 since she does not have the necessary expertise or skillto tamper an electric meter. She contends that she did not have anyknowledge of the alleged tampering of MERALCO's meter. Sheasserts that the inspection was conducted without the presence of anofficer of the law or an ERC representative,' in blatant violation ofSection 4 of R.A. 7832.

Respondent, on the other hand, insists that complainant violatedRA 7832 as evidenced by the tampered meter and that the inspection I

thereon was conducted in accordance with law. Respondent presented Idocumentary evidence such as the MOLiR4

, MERALCO Meter:Verification ReportS, ERC Report of Electric Watt-hour Meter Tests6, Iand Service Billing History7, to prove the existence of a tampered Imeter.

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It must be emphasized that distribution utilities are mandated by Ilaw to provide continuous, sufficient and reliable distribution servicesand connections to their distribution systems for their end-users withinjtheir respective franchise areas. As enunci~ted in the case of RidjO

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Tape & Chemical Corp. VS. Court of Appeals", MERALCO must ensurethat its electricity apparatuses and property are in good condition, nottampered or otherwise defective, to wit:

"Corollarily, it must be understood that MERALCO has theimperative duty to make a reasonable and properinspection of its apparatus and equipment to ensure thatthey do not malfunction, and the due diligence to discoverand repair defects therein. Failure to perform such dutiesconstitutes negligence."

Moreover, MERALCO, as a distribution utility, is required underSection 3 of Commonwealth Act No. 146 (eA 146) to conductperiodic inspection of its electric meters, to wit:

"Sec. 3. The Commission shall have the power toestablish a reasonable schedule of fees to be paid bypublic services concerned for testing services. Said testsshall be made only once every six months for taximeters;once every two-year period on electric meter and gasmeters: Provided, that this shall be without prejudice toany test asked for by any interested party, which shall bepaid by said party should it be found that the complaint isunjustified, or by the public service concerned should it befound otherwise."

This mandate is necessary in order to preserve theintegrity of the metering facilities of distribution utilitiesand to prevent other forms of insidious scheme or devicesto deliberately reduce electricity consumption which wouldprejudice the interest not only of the distribution utilitiesbut also of the consumers in general."

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Since complainants are contesting the validity of the findings of I,

MERALCO personnel, it is the burden of respondent MERALCO to Iprove the existence of a tampered meter and that the conduct of the',

inspection was done in accordance with law. .

Section 4 of RA 7832 provides:

"Section 4. Prima Facie Evidence - (a) the presenceof any of the following circumstances shall constitute primafacie evidence of illegal use of electricity as defined in this

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B G.R. No. 126074 February 24, 1998

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Act, by the person benefited thereby, and shall be the basisfor: (1) the immediate disconnection by the electric utility tosuch person after due notice, xxx:

x x x

(iv) The presence of a tampered, broken, or face sealon the meter, or mutilated, altered or tampered meterrecording chart or graph or computerized charges, graph,or log.

(v) The presence in any part of the building or itspremises which is subject to the control of the consumer oron the electric meter, of a current reversing transformer,jumper, shoring and/or shunting wire, and/or loopconnection or any other similar device;

x x x

(viii) x x x; Provided, however, That the discoveryof any of the foregoing circumstances, in order toconstitute prima facie evidence, must be personallywitnessed and attested to by any officer of the law or aduly authorized representative of the EnergyRegulatory Board (ERB)." (Underscoring supplied)

Under the law, the presumption that there is prima facie9 case ofillegal use of electricity stands when the discovery of any of thecircumstances (i.e. tampered meter) was witnessed by an officer of thelaw or a duly authorized representative of the ERG.,

When a prima facie 10 case exists, the distribution utility is Idischarged from the burden of proving the existence of pilferage under IRA No. 7832. A prima facie case of illegal use ;of electricity shall be thebasis for: (a) immediate disconnection by the electric utility or Icooperative to any such person after due nbtice; (b) the holding ofpreliminary investigation by the prosecutor and the subsequent filing inIcourt of the pertinent information; and (c) the lifting of any temporaryrestraining order or in)Unction which may have been issued against autility or cooperative. 1

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9 Prima facie evidence is defined as: I10 Evidence good and sufficient on its face. Such evidence as, in the judgment of the law, issufficient to establish a given fact, or the group or chain of f~cts constituting the party's claim atdefense, and which if not rebutted or contradicted, will retnain sufficient. Evidence which, ifunexplained or uncontradicted, is sufficient to sustain a judgment in favor of the issue it supportsi,but which may be contradicted by other evidence. H. Black, :et aI., BLACKS LAW DICTIONARY1190 (6th ed.,1990). I

11 Section 1, Rule III, RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 7832,as amended i

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ERC Case No. 2010-149CCDecision 113 June 2017Page 7 of 15

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In MERALCO vs. Spouses Chua and Paqueo,12 the HonorableSupreme Court enunciated the importance of having an authorizedgovernment representative present during inspection as this goes intothe essence of due process, thus:

"To reiterate, the discovery of a tampered, broken, or fakeseal on the meter shall only constitute prima facie evidenceof illegal use of electricity by the person who benefits fromthe illegal use if such discovery is personally witnessedand attested to by an officer of the law or a dulyauthorized representative of the Energy RegulatoryBoard (ERB). With such prima facie evidence, MERALCOis within its rights to immediately disconnect the electricservice of the consumer after due notice.

Section 1, Rule III of the Rules and RegulationsImplementing RA 7832 (IRR) defines an officer of the lawas one who, by direct supervision of law or by election orby appointment by competent authority, is charged with themaintenance of public order and the' protection andsecurity of life and property, such as barangay captain,barangay chairman, barangay councilman, barangayleader, officer or member of Barangay CommunityBrigades, barangay policeman, PNP policeman, municipalcouncilor, municipal mayor and provincial,fiscal.

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The importance of having an authorized governmentrepresentative present during an inspection washighlighted during the Senate deliberations on RA 7832when Senator John H. Osmena, the laws author,explained: i

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Mr. President, if a utility like MERALCOfinds certain circumstances or situations whichare listed in Section 2 of this bill 'to be primafacie evidence, I think they i should beprudent enough to bring in competentauthority, either the police or [the NBI, toverify or substantiate their finding. If theywere to summarily proceed to disconnect onthe basis of their findings and later on there,would be a court case and the customer or theuser would deny the existence of [what is listedin Section 2, then they could be in a lot oftrouble.

12 GR. NO. 160422, July 5,2010


We emphasized the significance of thisrequirement in Sps. Quisumbing v. MERALCO,when we said:

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The presence of government agents whomay authorize immediate disconnections gointo the essence of due process. Indeed, wecannot allow respondent to act virtually asprosecutor and judge in imposing the penalty ofdisconnection due to alleged meter tampering.That would not sit well in a democratic country.After all, Meralco is a monopoly that derives itspower from the government. Clothing it withunilateral authority to disconnect ,would beequivalent to giving it a license to tyrannize itshapless customers." (Underscoring supplied),

To prove the fact of theft and the liability of complainant,MERALCO presented several documents Such as the MFIR, the Joint-Affidavit of Inspection, Notice and a Meter and Device Laboratory TestRequest (MDLTR). According to Mr. Payba and Mr. Plesis-Dales, theyremoved the meter with no. 33SWN34224 from its meter base in thepresence of complainant. After removing the said meter, they showedthe same to complainant of its present condition. They then placed the,

subject meter in a meter plastic bag and sealed the bag with sealnumber B09BT0047569 to preserve its actual and true condition at thetime of inspection and removal. The meter b~g and tag thereon wasalso signed by complainant so that it cannot b,eopened until its arrivalto MERALCO's meter laboratory, MERALCP personnel installed anew electric meter with number 109BA 139937 to the electric service of

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IBased on the documents submitted, it was disclosed that the

Metering Facilities Inspection Report (MFIR) appears to be the only Idocument which speaks about the conduct of the inspection. While thecomplainant signed the MFIR, it was not shown whether there was an 'officer of the law or an ERC authorized representative present during Ithe inspection. Thus, the absence of said persons belies the existenceof a prima facie case for anti-pilferage. However, this does notnecessarily mean that MERALCO's right to present its case is alreadyforeclosed. As a consequence, MERALCO now carries the burden ofproving that theft was indeed committed by the complainant. It isundisputed that complainant was present and witnessed the inspection Iand consequent removal as well as replacement of the subject meter.

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ERC Case No. 2010.149CCDecision I 13 June 2017Page 9 of 15

complainant and explained to complainant that the subject meter willbe brought to MERALCO's meter laboratory for further testing.'3

IMERALCO presented to the Commission the "Notice", a Meter

and Device Laboratory Test Request (MOLTR) and the MFIR to dispelany doubt that the subject meter may have been manipulated byMERALCO prior to its laboratory testing.

MERALCO should show that it has fully complied with theprocedures in handling and custody of the subject kWh meter. Anydeviation on its part in the observance of such procedure would castdoubt on the probative value of the test results. It must establish thatwhat it tested in the laboratory was the same kWh meter it removedfrom the premises of the complainant.

Section 2 of Rule V of the Implementing Rules and Regulationsof R.A. 7832, as amended, provides: I

"RULE V

INSPECTION RULES AND PROCEDURES

Section 2. Routine Inspections Shall Be ConductedAs Follows:

x x x

c. Routine inspections shall be conducted with or without thepresence of the customer, actual' user or theirrepresentative, provided that no meter shall be removedwithout their presence, except for reasons of public policy.

d. During routine inspections, meters removed shall beplaced in a suitable container, properly identified andsealed and shall be opened only for testing by an ERCrepresentative. x x x. i

e. After each routine inspection, the DU's representativeshall prepare a routine inspection report indicating theirfindings if the meter is removed for testing. The DU'srepresentative must issue a notice clf meter testing tothe customer, actual user or their representative forthem to witness the testing of the said meter. If such,customer, actual user or representative fails to appearduring the designated time, the testing of the meter may

il'I Exhibit "1-A" of MERALCO; Joint-Affidavit of Inspection

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proceed in the presence of the ERC representative.xxx"

On 11 May 2010, MERALCO proceeded with the laboratorytesting in the presence of the Commission's representative, Engr.Vincent John G. Castro, to determine whether the subject meter wastampered. As inspected and verified by the Commission'srepresentative, the subject meter was placed in a plastic bag, dulysealed, unaltered and in an uncompromised condition before theconduct of testing. In the course of the laboratory testing, it wasverified and confirmed that the meter was in deed tampered. The,

test yielded the following results: '

"(1) Cover seals 20 MMIP 1996 weretampered by pulling out from the sealing wire;and

I(2) The driving gear of the 2,d shaft wasdeliberately filed causing it to disengagepartially from the driven gear of I the unitpointer when subjected to a dial test of 5000dial revolution. The meter registered only3kWh instead of 18kWh as required for anormal or untampered meter. Under thiscondition, the meter had been registering only16.66% of the actual energy used by thecustomer. ,,14

On the other hand, Engr. Castro also prepared a report'5indicating his findings on the laboratory' test of Meter No.33SWN34224. The laboratory test revealed that the subject meter wasindeed tampered and had an accuracy of 16.66%, to wit:

a. Cover seal condition: Deformedb. Filed gearc. Average Accuracy: 16.66%

With the pieces of evidence presented by MERALCO and thetest report of the representative of the Commission, MERALCO wasable to prove that the subject meter was tampered. Based on thedocumentary evidences it presented, MERALCO has sufficientlyshown to have complied with the procedures 'relative to the removal,handling, and testing of the kWh meter. There was no indication that it

14 Exhibit "12"; MERALCO Meter Verification Report15 Report of Electric Watthour Meter Tests

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deviated from the required procedures so as to compromise thephysical integrity of the kWh meter it tested. As inspected and verifiedby the Commission's representative, the subject meter was placed in aplastic bag, duly sealed, unaltered and in an uncompromised conditionbefore the conduct of testing.

With MERALCO having justified that indeed the electric meterwas tampered, a disputable presumption exist that complainantbenefitted by the illegal use of electricity. Thus, the burden of provingotherwise or the non-existence of the tampered meter now rests withthe complainant. Complainant should present contradicting evidenceto refute the presumption that they benefited from the illegal use ofelectricity.

Complainant, however, failed to present any evidence to supporttheir denial that they are not responsible on the existence of atampered meter. A defense of denial which is unsupported andunsubstantiated by clear and convincing evidence becomes negativeand self-serving, deserving no weight in law, 'and cannot be givengreater evidentiary value over convincing, straightforward andprobable testimony on affirmative matters.'6 .Indeed, denial is anintrinsically weak defense which must be buttressed with strongevidence of non-culpability to merit credibility."

Thus, the Commission finds basis on the imposition andassessment of differential bill against complainant in accordance withSection 6 of RA No. 7832, the Terms and Conditions of Serviceapproved by the Board of Energy (now ERC) in its Decision in BOECase No 85-121 and Article 35 of the MREC. The pertinent provisionsof which are as follows:

A. R.A. 7832

"Section 6. Disconnection of Electric Service.

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x x x

For purposes of this Act, "differential billi~g" shall refer tothe amount to be charged to the person concerned for theunbilled electricity illegally consumed by him asdetermined through the use of meth6dologies whichutilize, among others, as basis for determining the amountof monthly electric consumption in kilowatt-hours to be,billed, either: (a) the highest recorded monthlyconsumption within the five-year billing period preceding

I16 People of the Philippines VS. Carlita Mateo; G.R. No. 179036, July 28, 200817 People of the Philippines VS. Agustino Tamolon; G.R nO. 180169, February 27, 2009

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the time of the discovery, (b) the estimated monthlyconsumption as per the report of load inspectionconducted during the time of discover, (c) the higherconsumption between the average consumptions beforeor after the highest drastic drop in consumption within thefive-year billing period preceding the discovery, (d) thehighest recovered monthly consumption within four (4)months after the time of discovery, or (e) the result of theERB test during the time of discovery and, as basis fordetermining the period to be recovered by the differentialbilling either: (1) the time when the electric service of theperson concerned recorded an abrupt or abnormal drop inconsumption, or (2) when there was a change in hisservice connection such as a change of meter, change ofseal or reconnection, or in the absence thereof, amaximum of sixty (60) billing months up to the time ofdiscovery: Provided, however, That such period shall inno case, be less than one (1) year preceding the date ofdiscovery of the illegal use of electricity."

B. BOE Case NO.85-21

"CUSTOMER'S LIABILITY

x x x

Customers will be held responsible for tampering,interfering with, or breaking of seals of meters or otherequipment of the company installed on the Customer'spremises, and shall be held liable for the same accordingto the law. Xxx

The employees and/or representatives of theCompany are hereby given permission by the Customerto enter its premises without being liable to trespass todwelling for the purpose of inspecting, installing, reading,removing, testing, replacing, or otherwise disposing of itsapparatus and properly, and/or removing the Company'sentire property in the event of terminatio~ of the contractfor any cause. '

x x x

PAYMENTS:

x x x In the event of the stoppage, or t~e failure by anymeter to register the full amount of energy consumed, theCustomer shall be billed for such period :on an estimated

• •ERC Case No. 2010-149CCDecision /13 June 2017Page 13 of 15

consumption based upon his use of energy in a similarperiod of like use x x x"

C. MREC

"Article 35. Obligation to Pay Differential Billing. - Aconsumer who is discovered to have committed theoffense of illegal use of electricity shall, in addition to theimposition of appropriate penal sanction, be required topay a differential billing to the electric distribution utility tobe computed in accordance with existing law, rules andregulations."

Based on the billing history of the complainant, MERALCOcomputed the differential billing of PhP765,736.30 representing thevalue of electricity actually consumed by the registered consumer/userbut not registered in the meter on account of the tampered condition ofthe meter. MERALCO computed the amount of PhP765,736.30based on 1,163 kWh 18 This is the highest recorded monthlyconsumption of the subject service account of complainant within thefive-year billing period preceding the time of the discovery of thetampering multiplied by the number of months or allowable period ofrecovery and at the current rate of electricity at the time ofapprehension. The current rate means the average rate of electricityper kWh as reflected in the current bill. Current bill means the latestmonthly bill served by the distribution utility which does not include anyperiod before the time of apprehension.'9 i

In the absence of any compelling evidence to the contrary, theCommission is constrained to consider the weight of the evidencepresented by the respondent as against the denial and self-servingstatements of the complainant. The tampered condition complainant'smetering facility resulted in non-registration of' her actual electricalconsumption to the prejudice of the respondent.

In addition to the' unregistered consumption, MERALCO isentitled to collect surcharges from the complainant equivalent totwenty-five percent (25%) of her next currentltlean bill pursuant toSection 8 (a) of RA. 7832. I

WHEREFORE, the foregoing premises considered, thecomplaint filed by Luzviminda Villegas is hereby DISMISSED for lackof merit.

18 Exhibit "27" of MERALCO's Position Paper19 Paragraph 3, pars. (k) and (I) of IRR of RA 7832


Accordingly, complainant Villegas is hereby directed to pay theManila Electric Company (MERALCO) the differential billing amountingto Seven Hundred Sixty Five Thousand Seven Hundred Thirty SixPesos and 30/100 (phP765,736.30), plus 25% surcharge of theircurrent bills, within fifteen (15) days from receipt hereof.

SO ORDERED.

Pasig City, 13 June 2017.

FOR AND BY AUTHORITYOF THE COMMISSION

GL~~~. ~AP-TARUCcomm,ssfdner

We Concur:

JOSE VICENTE B. SALAZAR'Chairman

PATRICIA A. MAGPALE-ASIRIT

ALFRE, J.~Commis ioner J

, -~GEJONIMO D. STA. ANACoF~issioner

~/mccg/erc case nO.2010-149cc vil/egas vs mera/co decision final

* On preventive suspension as per Order of the Office of the Presid~nt (OP-DC Case No, 17-0-094) dated May 2, 2017

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Copy Furnished:

1. Atty. Raul G. CoraldeAtty. Edito E. CedroMANILA ELECTRIC COMPANY (MERALCO)Legal DepartmentOrtigas Avenue, Pasig City, Metro Manila

2. ATTY. MECHELLE KIETH F. GALVEZPublic Attorney's OfficeCounsel for Complainant3,d Floor, DSWD Rescue Center Bldg.,City Hall Compound I

Pasig City

Documents

$' ENERGY REGULATORY COMMISSION Appro'l~dfo,r~ P(J:;t1;:9!' I