Bill Deposit

Frequently Asked Questions about the Bill Deposit Update

The bill deposit is an amount required from all customers of all distribution utilities as a guarantee for payment of electric bills. It is similar to the advance deposit made by a tenant who rents an office or a residence.

Bill deposit is equivalent to the customer's estimated billing for one month, which will initially be based on how much electricity the customer estimates he will be consuming or the customer's load schedule provided upon application for electric service with MERALCO. It may be adjusted yearly based on the actual average monthly consumption of the customer.

The collection of bill deposit from customers, as being implemented by most, if not all, of the distribution utilities (DUs), has been authorized as far back as the time of the Board of Power and Waterworks and up to the present Energy Regulatory Commission (ERC). The collection of a deposit is not a requirement unique to the distribution utility business. In fact, other utilities such as those engaged in water and cable services likewise require a guarantee deposit from its customers.
The applicable rules governing bill deposits can be found in the Magna Carta for Residential Electricity Consumers and Distribution Services and Open Access Rules (DSOAR). Below are some links/downloads for your reference:
  1. Magna Carta for Residential Electricity Consumers
  2. DSOAR
A bill deposit shall be required from the following:
  • New customers applying for electric service;​
  • Existing customers applying for transfer of service;
  • Existing customers applying for an increase in load/ capacity;
  • Existing customers with disconnected services applying for a reconnection, and who were previously not subjected to bill deposit;
  • Existing customers whose actual average monthly consumption for the past twelve (12) months increased by more than 10% of the initial bill deposit paid upon application for electric service by the customer;
  • Existing customers who have previously availed of the refund of bill deposit due to good credit rating and who later default in payment of his monthly bill/s.
Yes, the bill deposit earns interests, in accordance with the existing rules of the ERC. Unlike in the case of DUs, the deposits being required by other utilities or industries or under a lease arrangement, do not normally earn any interests.
The AUBD program aims to determine if the bill deposit is enough to cover the customer's average monthly bills, and to update the bill deposit, if necessary. Accrued interest shall be applied to bill deposit adjustments.

The AUBD shall be done in two ways: through the collection of an additional amount in case of insufficient deposit, or through refund to customer of any amount beyond the required deposit. The AUBD takes place during the customer's contract anniversary month.
Sufficiency of the bill deposit is determined by comparing a customer's existing bill deposit, including accumulated interest, with the average monthly bills for the past twelve (12) months. The allowable difference is +/- 10% of the customer's existing bill deposit.
  1. ​​If the bill deposit is greater than the average bill by more than 10%, the excess bill deposit will be refunded to the customer through his bill/s;

  2. If the bill deposit is less than the average bill by more than 10%, additional bill deposit equivalent to the insufficient amount will be collected from the customer;

  3. If the difference falls within the allowable difference, the customer will be exempted from the collection of insufficient deposit and will not qualify for the refund of amount beyond the required deposit.
Meralco will inform the customer about the refund or collection through a notification letter or through the electric bill.

To illustrate:

  1. Bill Deposit and Interest Earnings:
    Bill Deposit P 100.00
    Plus: Interest Earned P 170.50
    Total Bill Deposit and Interest P 270.50
  2. Bill Deposit Update:
    Average Monthly Bill (SEP 2011 – AUG 2012) P 721.20
    Less: Total Bill Deposit and Interest P 270.50
    Additional Bill Deposit to be Collected P 450.70*

    * P 37.56 – monthly installment payment for twelve (12) months

  1. Bill Deposit and Interest Earnings:
    Bill Deposit P 2,000.00
    Plus: Interest Earned P 170.50
    Total Bill Deposit and Interest P 2,170.50
  2. Bill Deposit Update:
    Average Monthly Bill (SEP 2011 – AUG 2012) P 1,444.75
    Less: Total Bill Deposit and Interest P 2,170.50
    Bill Deposit beyond the required amount to be Refunded P -725.75
Yes, any required additional bill deposit shall be collected from MERALCO customers over a period of twelve (12) months starting January 2013. Please note, however, that such payment arrangement is an initiative on the part of MERALCO and approved by the ERC, to provide MERALCO customers a more manageable payment plan. For customers who received their notification letter in October 2012, no disconnection will be implemented for failure to pay additional bill deposit within 30 days.
Yes. However, customers with good payment record of consistently paying on or before the due date for three (3) consecutive years will be notified through letters in January 2013 that they are eligible to avail of the refund of their bill deposit and accrued interest.

However, under the rules of the ERC, a bill deposit previously refunded in full prior to the termination of service may be reimposed if the customer defaults in the payment of his monthly bill on the due date. Further, once the bill deposit is reimposed, the customer loses the right to refund the same prior to the termination of his electric service. As such, customers are encouraged to continue paying bills on or before the due date to maintain a good payment record to avoid bill deposit reimposition.
Meralco prioritized the implementation of all refund programs that will benefit its customers. Since all refund programs are nearing completion, Meralco is now implementing the AUBD as prescribed by the Magna Carta and the DSOAR.
MERALCO made prior announcements about the AUBD, to all its customers affected by said program through notification letters. Below is a sample of the letter sent to Meralco customers.

Refund Letter Sample: