ÿþD e c i s i o n E R C C a s e n o . 2 0 0 1 - 7 4 3 - ERC LIA

WILLIAM L. CHAN,Complainant,

- versus -

MANILA ELECTRIC COMPANY(MERALCO),

Respondent.)(- - - - - ~ - - - - - - - - - - - - - - - - -)(

ERC CASE NO. 2001-743(ERB CASE NO. 2000-154)

D 0 C,&liil T Ii DDate: ,~•.t;~~..~.,~~!5~:' _-V.Ll. .............•....-

•

DECISION

Prefatory Statement

Electricity is properly the enjoyment of which theprovider, such as [a distribution utility], may extend ordeny to others.' However, electricity is. not just anyproperly, and [a distribution utility] is not just any properlyowner. Electricity is a basic necessity the generation anddistribution of which is imbued with public interest, and itsprovider is a public utility subject to strict regulation by theState in the exercise of police power. Failure to complywith these regulations will give rise to the presumption ofbad faith or abuse of right. 1

1 Samar II Electric Cooperative, Incorporated (SAMELCO II) and Dacula vs. Quijano,G.R. No. 144474, April 27, 2007 citing United States vs. Carlos, 21 Phil. 553, 560(1911), Article 429 of the Civil Code of the Philippines, Republic vs. ManilaEI.ectric Company, 440 Phil. 389, 397 (2002), and Manila Electric Company vs.Hon. Lorna Navarro-Domingo, G.R. No. 161893, June 27, 2006, 493 SCRA /363,371. /1

ERC Case No. 2001-743 (ERB Case No. 2000-154)DECISION/September 14,2015 of 28

This is the underlying reason why a public utility isrequired to exercise utmost care and diligence in dealingswith its customers. To paraphrase the principle laid downby the Supreme Court, a public utility has dominance overits market and its customers. Thus, in the regulationthereof, the State considers the serious consequencesand hardships that a customer may stand to suffer uponservice disconnection as well as his relatively weakbargaining position as against a public utility. 2

Conversely, a person who, under threat of servicedisconnection, was made to settle excessive charges,must be afforded the full protection of the laws. Thus, themaxim: Nemo cum alterius detrimento protest (Noperson should unjustly enrich himself at the expenseof another).

Before the Commission for resolution are the "Letter-Complaint"and "Amended Complaint" filed on May 26, 1999 and February 15,2001, respectively, by Mr. William L. Chan against the Manila ElectricCompany (MERALCO) for alleged bloated and/or anomalous billingsand praying, among others, that the amount of PhP2,086,479.45 bereturned and reimbursed to him.

The facts of this case as gathered from the records are:

1. Complainant Mr. Chan is doing business under the nameand style "B&W Ice Plant" with office address at No. 537Arnaiz Avenue, Pasay City. He is engaged in thebusiness of manufacturing tube ice;

2. Respondent MERALCO is a private corporation organizedand existing, under the Philippine laws to operate, as i.tdoes, as a public utility company and a monopoly, being agrantee of a legislative franchise, under which it isauthorized, among others, to charge all customers orusers, including the government, for their respectiveconsumption of electric energy at the rates authorized bythe then Board of Energy (BOE) and the then EnergyRegulatory Board (ERB), now known as the EnergyRegulatory Commission (ERC);

2 Manila Electric Company (MERALCO) VS. Sps. Edito and Felicidad Chua, andJosefina Paqueo, G.R. No. 160422, July 5, 201~. '1

ERC Case No. 2001-743 (ERB Case No. 2000-154)DECISION/September 14,2015 of 28 .

3. Upon approval of Mr. Chan's application for the supply ofelectric power for his ice plant [Service Identification No.(SIN) 800633901], MERALCO installed the necessaryelectrical equipment. Among these are Active ElectricMeter with No. 701GE00067 and Reactive Electric Meterwith No. 701DQAD16. Both electric meters were installedoutside the premises of his ice plant;

4. On November 16, 1998, Mr. Chan discovered that one ofhis kWh meters was missing and immediately reportedthe same to MERALCO. This discovery was made whenhe noticed that his monthly energy consumption wasconsistently pegged at 165,240 kWh. for three (3)consecutive months, particularly, the billing in the periodsof August 11, 1998 to September 11, 1998, September11, 1998 to October 12, 1998, and October 12, 1998 toNovember 11, 1998. He concluded that MERALCO billedhim based on assumed reading. He manifested that thecharges imposed by MERALCO, which was based onestimated energy consumption, is unacceptableconsidering that the ice plant's production decreasedduring those periods and that it is higher than his averagemonthly consumption;

5. On November 20, 1998, MERALCO installed a new kWhmeter;

6. Incidentally, on November 26, 1998, one of MERALCO'srepresentatives conducted a phase angle testing on thenewly installed kWh meter and discovered that theinstallation of the new kWh meter was defective. On evendate, the said representative made the necessaryadjustments to rectify the installation defects;

7. To avoid unnecessary service disconnection and/orinterruption, Mr. Chan paid his electricity consumptions asbilled by MERALCO under protest;

8. Believing to have fully settled his obligations withMERALCO, what prompted Mr. Chan to file the "Letter-Complaint" and "Amended Complaint" was the billingassessments he received on May 19, 1999 amounting toPhP205,084.40 which must be settled on or before May27, 199~

1


9. Unsatisfied with the explanations given by MERALCO, heinstituted the foregoing complaints to recover, amongothers, the total amount of PhP2,086,479.45, brokendown as follows:

September 11, 1998 to October 12, 1998

October 12,1998 to November 11, 1998*

October 12, 1998 to November 11, 1998

PeriodAugust 11, 1998 to September 11, 1998

November 11, 1998 to December 11, 1998*

November 11, 1998 to December 11, 1998

541,877.85Paid on October 23, 1998, Full Pa ment

548,656.05Paid on October 30, 1998, Full Pa ment

389,559.73Paid on Janua 18, 1999, 70% of PhP556,513.90

335,549.80Full Pa ment - Machine Validation

101,202.55Paid on Ma 26, 1999, Full Pa ment

103,881.85Paid on Ma 26, 1999, Full Pa ment

Total 2,086,479.45Note: * MERALCO's billing adjustment for the period September 11, 1998 to December 11, 1998based on daily average energy consumption from August 11, 1998 to September 11, 1998 andfrom November 26, 1998 to December 11, 1998 at 4,792 kWh/da

10. In defense of the foregoing and despite having admittedin its letter-reply dated December 9, 1998 as stated in its"Answer with Counterclaim" filed on June 4, 2001, that forthe billing periods September 11, 1998 to October 12,1998 and October 12, 1998 to November 11, 1998, therewere no actual meter readings on which the billings couldbe properly based ostensibly due to the missing meter,MERALCO believed it was then necessary to use thesame actual meter reading in kWh for the previous billingperiod of August 11, 1998 to. September 11, 1998 at165,240 kWh;

11. It further alleged that the contract between the registeredcustomer Ms. Gina M. Chan and MERALCO, both partiesare covered by the "Terms and Conditions of Service", thepertinentprovisionsofwhichareasfOllf


"Terms and Conditions of Service

x xx.

Customer Liability:

In the event of loss of, or damage toproperty of the Company through misuse ornegligence on the part of the Customer or hisemployees or household members, the cost ofthe necessary repairs or replacement thereofshall be paid to the Company by theCustomer.

Customers will be held responsible fortampering, interfering with, or breaking ofseals of meters or other equipment of theCompany installed on the Customer'spremises, and shall be held liable for thesame in accordance with law. The Customeragrees that no one except employees of theCompany showing proper identification cardshall be allowed to make any internal orexternal adjustments of any meter or anyother piece of apparatus owned and belongingto the Company.

The employees and/or representativesof the Company are hereby given permissionby the Customer to enter its premises withoutbeing liable to trespass to dwelling for thepurpose of inspecting, installing, reading,removing, testing, replacing, or otherwisedisposing of its apparatus and properly and/orremoving the Company's entire property in theevent of the termination of the contract of anycause.

xxx~


Payments:

Bills will be rendered by the Company tothe Customer monthly in accordance with theapplicable rate schedule. Said bills arepayable to collectors or at the main or branchoffices of the Company or its authorized bankswithin ten (10) days after the regular readingdate of the electric meters. The word "month"as used herein and in the rate schedule ishereby defined to be the elapsed timebetween two succeeding meter readingsapproximately thirty (30) days apart. In theevent of the stoppage or the failure by anymeter to register the full amount of energyconsumed, the Customer shall be billed forsuch period on an estimated consumptionbased upon his use of energy in a similarperiod of like use or the registration of thecheck meter.

Discontinuance of Service:

The Company reserves the right todiscontinue service in case the Customer is inarrears in the payment of bills or for failure topay the adjusted bills in those cases were themeter stopped or failed to register the correctamount of energy consumed, or for failure tocomply with any of these terms and conditionsor in case of or to prevent fraud upon theCompany. Before disconnection is made incase of or to prevent fraud, the Company mayadjust the bill of said customer accordinglyand if the adjusted bill is not paid, theCompany may disconnect the same. In caseof disconnection, {he provisions of RevisedOrder No. 1 of the former Public ServiceCommission (now Board of Energy) shall beobserved. Any such suspension of serviceshall not terminate the contract between theCompany and the Custome~

V


12. Based on the foregoing provisions, MERALCO contendedthat it has the contractual and legal right to disconnectelectric service for the default of its customers to pay itsregular bills or adjusted bills in those cases where themeter stopped or failed to register the full amount ofelectric energy consumed by Mr. Chan;

13. MERALCO further contended that the use of estimatedconsumption in cases where the meter fails to register theactual consumption is contractually and legallypermissible as long as it is based on a similar period oflike use. It is submitted that the use of a priorconsumption reading on subsequent billing periods iscovered by the above provision and falls under the phrase"similar period of like use";

14. On its part, MERALCO summarized the payments madeby Mr. Chan as follows:

Ms. Gina M. Chan - Service Identification No. 800633901

Period Ori~inal Bills Amount Adjusted Bills Total

Covered kWh Amount PaidkWh Amount Payment

(PhP) (PhP) (PhP) (PhP)August 11, 1998 to 165,240 541,877.85 541,877.85 (none) (none) 541,877.85September 11, 1998 (Paid on October 164,240 541,877.85

23,1998,O.R. No. 25682)

September 11, 1998 165,240 548,565.05 548,565.05 148,552 498,078.10 548,565.05to October 12, 1998 (Paid on October 498,078.10

23, 1998, O.R. No. (50,486.95)25682)

October 12, 1998 to 165,240 556,513.90 389,559.73 143,760 490,762.65 490,762.65November 11, 1998 (Partial Payment 389,559.73

on January 1, 101,202.921999, OR No. (Paid on May 26,

74846) 1999, OR No.251560)

November 11, 1998 to 98,229 335,549.80 335,549.80 127,080 439,431.65 439,431.65December 11, 1998 (Paid under Pay to 335,549.80

Cash Check No. 103,881.8547530) (Paid on May 26,

1999, OR No.251560)

Total 1,815,552.43 1,970,150.25 2,020,637.20Total Amount Of Bills To Be Paid By The Customer PhP1,970,150.25Total Amount Paid By The Customer PhP2,020,637.20Difference (Still bein~ verified with payments if already credited to the customer) PhP50,486.95


15. Thus, MERALCO prayed that the complaints filed by Mr.Chan be dismissed for lack of merit and that then ERBrecognize the adjusted billings assessed and rendered forthe periods September 11, 1998 to October 11, 1998,October 12, 1998 to November 11, 1998 and November11, 1998 to December 11, 1998.

Upon the filing of Mr. Chan's "Letter-Complaint" on May 26,1999, several conferences were held between him and MERALCObut no amicable settlement was reached. Thus, the initial hearingwas scheduled on September 18, 2000.

During the September 18, 2000 pre-hearing conference, Mr.Chan and MERALCO failed to appear despite due notice. In viewthereof, said hearing was reset to October 16, 2000.

At the October 16, 2000 pre-hearing conference, Mr. Chan andMERALCO explored the possibility of arriving at a settlement.

On February 15, 2001, Mr. Chan filed an "Amended Complaint"and a "Motion to Admit Amended Complaint".

At the. continuation of the pre-hearing conference on February23, 2001, MERALCO did not interpose any objection to the admissionof the amended complaint. However, it moved that it be allowed tofile its comment thereon. In view thereof, Mr. Chan's motion to admithis amended complaint and MERALCO's motion to file commentthereon were granted.

On June 1, 2001, Mr. Chan filed a "Manifestation".

On June 4, 2001, MERALCO filed its "Answer withCounterclaim" .

During the June 5, 2001 pre-hearing conference, Mr. Chan andMERALCO discussed the manner by which the latter computed thedifferential billings subject of the complaints. Thereafter, theymutually agreed that in order for Mr. Chan to fully understand thebasis and manner of the said computations, MERALCO shouldpresent its billing officer and the meter reader at the next hearing forfurther explanation and clarification. ~

y


At the continuation of the pre-hearing conference on June 21,2001, MERALCO presented Ms. Conchita Bolos from. its PowerBilling Department, who explained the basis used in the computationof Mr. Chan's differential billings. Thereafter, Mr. Chan moved for areconsideration of the said computations and requested that thesame be based on the ice plant's consumptions for the previousmonths up to the period in question. MERALCO, on the other hand,agreed to present its engineer at the next hearing to enlighten Mr.Chan with regard to reactive power, to present his billing history,detailed computation of his differential billings and his re-billings aswell as to verify the name of MERALCO's personnel who conductedthe meter reading on his meter.

At the July 10, 2001 pre-hearing conference, MERALCOpresented Engr. Edgar B. Caras, who explained the basis for thecomputation of Mr. Chan's differential billings. On the other hand, Mr.Chan reiterated his allegation that his meter was removed sinceAugust 1998. Said allegation was denied by MERALCO.

In view of Mr. Chan and MERALCO's failure to settle the caseamicably, a formal hearing was set on August 10, 2001.

During the August 10, 2001 hearing, Mr. Chan testified aswitness. In the course of his testimony, he identified and caused themarkings of his documentary evidence.

Thereafter, MERALCO lengthily cross-examined the witness.

On several dates, series of hearings were conducted whereinMr. Chan and MERALCO were consistently reminded to explore thepossibility of amicable settlement.

During the April 25, 2002 hearing, MERALCO concluded itscross-examination on Mr. Chan.

'l

ERC Case No. 2001-743 (ERB Case No. 2000-154)DECISION/September 14,2015 of 28 .

At the May 13, 2002 hearing, Ms. Chan was presented aswitness to corroborate Mr. Chan's testimony relative to theinspections conducted by several personnel of MERALCO.MERALCO objected to the presentation of the said witness on theground that she was being presented to testify on alleged matterswhich were not included in the amended complaint. Nevertheless,the Commission allowed Ms. Chan to testify subject to the issuanceof a ruling on the matter. In connection therewith, MERALCOmanifested its continuing objection to the presentation of the saidwitness and declined to conduct its cross-examination until after theCommission has ruled on its objection.

On May 22, 2002, the Commission issued an Order denyingMERALCO's objection during the May 13, 2002 hearing for lack ofmerit.

During the October 7, 2002 hearing, Mr. Chan and MERALCOmoved for the deferment of the hearing to allow the parties to discussthe possibility of an amicable settlement.

Several hearings were held on March 6 and 10, 2003 and April3, 2003, but no amicable settlement was reached.

On May 29, 2003, Mr. Chan filed his "Formal Offer ofEvidence".

On June 27, 2003, MERALCO filed its "Comment to FormalOffer with Manifestation".

At the continuation of the hearing on October 7, 2003,MERALCO presented its first witness, Ms. Bolos. In the course of herdirect testimony, several documents were identified and duly markedas Exhibits "1" to "3-H".

The said witness was lengthily cross-examined by Mr. Chanduring the November 5 and 25, 2003 and December 10, 2003hearings.

At the June 10, 2004 hearing, MERALCO presented its secondwitness, Mr. Bernard Valderrama. In the course of his directtestimony, several documents were presented, identified and dulymarked as Exhibits "4" to "7-A"A ;:;


During the July 28, 2004 hearing, only Mr. Chan appeared. Asa result of the unexplained absence of MERALCO, he moved that thedirect testimony as well as the documents identified by Mr.Valderrama be stricken from the records. Said motion was noted.

At the continuation of the hearing on September 21, 2004where Mr. Chan was supposed to cross-examine Mr. Valderrama, heasked for the original bill that the witness agreed to bring with him tothe hearing. However, said witness gave a different set ofdocuments.

As a result, Mr. Chan moved that the testimony of said witnessand the documents he identified during his direct testimony beexpunged from the records. On the other hand, MERALCOrequested that it be given a period of five (5) days within which to fileits comment thereon. Said request was granted.

At the continuation of the hearing on October 27, 2004,MERALCO manifested that it would no longer present any witnessand that it filed its comment on the motion to strike out Mr.Valderrama's testimony from the records. Upon learning of such fact,Mr. Chan moved that the said comment be stricken from the recordsand be considered as mere scrap of paper considering that the samewas filed beyond the five (5)-day period granted by the Commissionduring the September 21, 2004 hearing.

On even date, MERALCO filed its "Comment to Motion toStrike-Out Testimony of Witness Bernard Valderrama".

On November 2, 2004, the Commission issued an Orderstriking out from the records the. comment belatedly filed byMERALCO.

On November 16, 2004, Mr. Chan filed a "Manifestation andMotion".

On November 19, 2004, MERALCO filed a "Motion forReconsideration of the Order Dated November 2,2004".

On December 9, 2004, Mr. Chan filed his "Comment/Oppositionto Motionfor ReconSideratio~

ERC Case No. 2001-743 (ERB Case No. 2000-154)DECISION/September 14, 2015 of 28

On October 26, 2005, the Commission issued an Order strikingout from the records MERALCO's comments to the motion to striketestimony of Mr. Valderrama as well as its Exhibits "4", "4-A" , "5", "5-A', "6", "6-A', "7" and "7-A" and the portion of the said witness'testimony pertaining to the documents generated from its CustomerManagement System.

In the same Order, MERALCO was directed to submit its formaloffer of evidence within fifteen (15) days from receipt thereof.

On February 6, 2006, MERALCO filed a "Partial Motion forReconsideration of the Order Dated October 26, 2005",

On March 9, 2006, Mr. Chan filed his "Comment/Opposition (ToRespondent's Partial Motion for Reconsideration Dated February 6,2006)".

On March 1, 2007 and October 2, 2007, Mr. Chan filed two (2)separate motions to resolve the complaints.

On June 16, 2010, the Commission issued an Order setting thecase for a conference on June 28, 2010 to afford the parties ampleopportunity to ventilate and argue their respective positions beforethe Commission takes any action thereon.

During the June 28, 2010 conference, Mr. Chan andMERALCO maintained their respective arguments. Despite severaldirectives to settle their dispute amicably, the same remained futile.

On May 2, 2011, the Commission issued an Order denyingMERALCO's "Partial Motion for Reconsideration of the Order DatedOctober 26, 2005" for lack of merit.

In the same Order, MERALCO was directed anew to submit itsformal offer of evidence within fifteen (15) days from receipt thereof.

On July 22, 2011, MERALCO filed a "Manifestation as to Filingof Certiorari" and a "Request to Defer Filing of Formal Offer ofExhibits".

On August 10, 2011, Mr. Chan filed his "Vigore sOpposition/Objection (To Request to Defer Filing of EXhibia


On September 5, 2011, MERALCO filed a "ManifestationWithdrawing Intention to File Certiorari with Formal Offer of Exhibits".

On October 3, 2011, Mr. Chan filed his "Comment/Objection toRespondent's Offer of Evidence".

On January 23, 2013, the Commission issued an Orderdirecting MERALCO to submit, within five (5) days from receiptthereof, certified true copies of Ms. Chan's Electric Bills (ServiceIdentification No. 800633901-9) for the periods July 10, 1995 toDecember 12, 1995, July 10, 1996 to December 12, 1996, July 10,1997 to December 12, 1997, and April 10, 1998 to December 12,1998.

Relative thereto, on March 6, 2013, MERALCO submitted its"Compliance" .

On May 5, 2014, the Commission issued another Orderdirecting MERALCO to submit, within five (5) days from receiptthereof, certified true copies of Ms. Chan's Meter Readings (ServiceIdentification No. 800633901-9) for the period April 10, 1997 to April12, 2000, pursuant to Article 2.11.2 (General Information onMetering) of the Amended Distribution Services and Open AccessRules (DSOAR).

On May 16, 2014, MERALCO submitted its "Compliance".

The Commission hereby admits the formal offers of evidenceand exhibits respectively filed by Mr. Chan and MERALCO, for beingrelevantand material in the evaluationof the comPlai~


DISCUSSION

With the admission that MERALCO consistently billed Mr. Chanwith a monthly energy consumption of 165,240 kWh for the periodsAugust 11, 1998 to September 11,1998, September 11, 1998 toOctober 12, 1998, and October 12, 1998 to November 11, 19983without actual meter reading, and MERALCO's new kWh meter wasdefectively installed and its meter reading was used for the periodNovember 20 to 26, 19984, and the determination that Mr. Chan fullyand excessively paid under protest his electricity bills for the disputedperiods, the primordial issue that has to be resolved is whether Mr.Chan is entitled to a total refund of PhP2, 086,479. 45.

Undeniably, Mr. Chan consumed electricity when he operatedhis ice plant during those periods~ sans actual meter reading.However, the Commission is convinced that Mr. Chan must not bemade liable to pay for electricity which he did not actually consumesince the operation of an ice plant is seasonal, particularly, during themonths of the disputed billing periods wherein the production of ice islow.

Thus, every person who through an act of performance byanother, or any other means, acquires or comes into possession ofsomething at the expense of the latter without just or legal ground,shall return the same to him5

.

It bears stressing that the metering facility of the ice plant(Industrial Customers) involves two (2) kiloWatt-hour (kWh) meters.The said installation is the most technically accepted design beforethe advent of electronic multi-functional kWh meter.4'

.~

3 Page 8, Item 4.6, MERALCO's "Answer with Counterclaim"4 Page 11, Item 4.13, MERALCO's "Answer with Counterclaim"5 Article 22, Civil Code of the Philippines


One of the kWh meters (kWh1) installed in the subjectestablishment is intended to monitor the monthly energy consumptionand demand of the customer while the other one (kWh2), with phase-shifting transformers, is intended to monitor the monthly power factorof the customer. The monthly energy consumption is determineddirectly through the kWh1 meter readings while the power factor iscomputed accordingly using the general formulae shown below. Thecomputation requires RkVAh reading, which is retrieved from thekWh2 meter, and the energy consumption (kWh readings), which ismonitored by the kWh1 meter.

!

Formula 1 I Qr = (2 x qr) - Pr~3-----

I Formula 2 I pf = cos

I

[ tan-1 (~)] I

Where:

Qr is the total reactive energy or the total kVARh consumption

Pr is the total active energy or the total kWh consumption whichwas based on the difference of the present reading from theprevious reading of the kV\fh1 meter

qr is the RkVAh consumption which was based on thedifference of the present reading from the previous reading ofthe kWh2 meter

pf is the power factor of the load

On November 16, 1998, Mr. Chan discovered that one of hiskWh meters was missing and immediately reported the same toMERALCO. This discovery happened when he noticed that hismonthly energy consumption was consistently pegged at 165,240kWh on his electricity bills for three (3) consecutive months,particularly, the billing periods of August 11, 1998 to September 11,1998, September 11, 1998 to October 12, 1998. and October 12,1998 to November 11, 1998. Confused with such billing statements,he investigated the matter which eventually led to the discovery of thesaid missing meter. He concluded that MERALCO billed him basedon assumedreading~


The missing meter is the kWh1 meter which monitors andreflects the monthly energy consumption of Mr. Chan. He manifestedthat the charges imposed by MERALCO, which was based onestimated energy consumption, is unacceptable considering that theice plant's production decreased during those periods and the factthat the estimated energy consumption was higher than his averagemonthly consumption.

On November 20, 1998, MERALCO installed a new kWh meter.Incidentally, on November 26, 1998, it was discovered that theinstallation of the new kWh meter was defective. On even date,MERALCO made the necessary adjustments to rectify the installationdefects.

Despite Mr. Chan's protest, he still paid the correspondingbilling charges to MERALCO in order to prevent disconnection.Shown below is the summary of his payments:

Estimated AmountPeriod Consumption (PhP)(kWh)August 11, 1998 to September 11, 1998 165,240.00 541,877.85September 11, 1998 to October 12, 1998 165,240.00 548,656.05October 12, 1998 to November 11, 1998 165,240.00 389,559.73October 12, 1998 to November 11, 1998 101,202.55November 11, 1998 to December 11, 1998 127,080.00 335,549.80November 11, 1998 to December 11, 1998 103,881.85

Total 622,800.00 2,020,727.83

Noteworthy to mention is that the incident happened prior to theeffectivity of the Magna Carta for Residential Electricity Consumersand the DSOAR. Thus, the applicable provision is that specified inERB Resolution No. 95-21 (The Standard Rules and RegulationsGoverning the Operation of Electric Power Services) wherein Section43 Paragraph 2 of the said Resolution provides that:

. . . ~


"x x x. In the event of stoppage or the failure of anymeter to register the full amount of energy consumed, thecustomer shall be billed for such period on an estimatedconsumption based upon his average use of energy forthe immediately preceding six-month period of like use orthe registration of a check meter subject to theapproval of the Board, except when the utility and thecustomer do not agree on such bill, in which case,the Board shall resolve the same." (EmphasisSupplied)

MERALCO submitted two (2) data records of Mr. Chan'smonthly consumption, namely: the Meter Reading Report and theBilling Record6, as summarized in the table below. It can beobserved that there is a discrepancy in the data presented in bothreports, particularly, the period of September 11, 1998 to November11, 1998. The discrepancy bolstered the claim of Mr. Chan that thekWh1 meter was already missing considering that there was noavailable data in the MERALCO Meter Reading Report during thesaid period.

The integrity of the data in the MERALCO Billing Record isquestionable considering that the kWh 1 meter was already missingduring the said period. It can also be noticed on the said record thatthe RkVAh consumption, retrieved from kWh2 meter, manifestednegative reading (after several over-readings) which is improbableconsidering that there was no report submitted that the said meterwas found to be defective. In fact, the said meter was usedcontinuously even after replacement of the missing kWh1 meter. Thismeans that the meter readings used by MERALCO during the periodin question were mere estimaf

6 MERALCO's "Compliance" filed on May 16, 2014


Table 1. Summary of the Submitted MERALCO Records

MERALCO Meter Reading Report MERALCO Billing Record

No. Reading kWh1 meter kWh2 meter (RkVAh) kWh1 meter (kWh) kWh2 meter (RkVAh)Date Readings Difference Demand

Readings Difference(kWh) (kWh) (kW) Difference Readings Readings Difference

1 01/10/97 1140 - 2.26 9643 - - - - -2 02/11/97 1909 769 2.12 10120 477 - - - -3 03/11/97 2564 655 2.12 10541 421 - - - -4 04/11/97 3363 799 2.16 11033 492 - - - -5 05/12/97 4422 1,059 2.00 11633 600 - - - -6 06/11/97 5530 1,108 2.07 12415 782 - - - -7 07111/97 6556 1,026 2.11 13112 697 - . - -8 08/12/97 7696 1,140 1.99 13976 864 - - - -9 09/11/97 8695 999 1.99 14858 882 - - - -10 10/13/97 9914 1,219 1.99 15943 1,085 - - - -11 11/12/97 10377 463 1.96 16345 402 - - - -12 12/11/97 10916 539 2.16 16851 506 - . - .13 01/12/98 11661 745 2.15 17449 598 11661 - 17449 -14 02/11/98 12391 730 2.14 18059 610 12391 730 18059 61015 03/12/98 13260 869 2.12 18813 754 13260 869 18813 75416 04/13/98 14249 989 2.07 19686 873 14249 989 19686 87317 05/11/98 15222 973 2.12 20542 856 15222 973 20542 85618 06/11/98 16350 1,128 2.13 21532 990 16350 1,128 21532 99019 07/10/98 17454 1,104 2.23 22496 964 17454 1,104 22496 96420 08/11/98 18826 1,372 2.20 23702 1,206 18826 1,372 23702 1,20621 09/11/98 20203 1,377 2.20 24920 1,218 20203 1,377 24920 1,21822 10/12/98 - - - - - 21580 1,377 26138 1,21823 11/11/98 - . - - - 22957 1,377 27356 1,21824 * 11/20/98 5 - 2.00 25662 - 5 - 25664 (1,692)25 ** 11/25/98 95 90 . 25692 30 95 90 25692 2826 12/11/98 578 483 - 26056 364 578 483 26056 364

Note a. Highlighted rows have no data integrityb. * Replaced the missing kWh1 meter with a new onec. ** Resolved the new but defective kWh meter

The data in MERALCO's Billing Record also supported theassumption that it consistently charged Mr. Chan with mere estimatedenergy consumption for the period of September 11, 1998 to October12, 1998. MERALCO must have been aware of the missing meterduring its meter reading for the period of October 12, 1998. However,instead of replacing the missing meter, it opted to continuouslycharge Mr. Chan, in the next two (2) successive billing periods, withestimated energy consumption. In fact, MERALCO acknowledgedthat the meter was lost some time during the said period when theactual readings in Mr. Chan's billing statements were not indicated.MERALCO should have addressed the problem immediately and notwaited for any complaint or report from the customers regarding itsfacilitiesor any irregUlariti~


There was evident negligence on the part of MERALCOconsidering that it did not replace the missing meter when itconducted its regular monthly meter reading. Had it addressed thematter immediately, the unregistered consumption should have beenone billing cycle only and the disputed unregistered energyconsumption should have been limited. Thus, it may be fair enoughthat the disputed unregistered consumption should be based on thelowest monthly energy consumption within three (3) months uponreplacing the missing kiloWatt-hour (kWh) meter considering that theprolonged period of unregistered consumption is not due to the faultof Mr. Chan.

Nevertheless, the energy consumption or the reading of kWh1meter could be determined using the registered consumptionretrieved from kWh2 meter.

The determination of the power factor is correlated anddependent on the energy readings from the kWh1 meter based on theformula previously discussed. Considering that kWh1 is alreadymissing, the Commission formulated an alternative solution to resolvethe appropriate energy consumption of the disputed periods using theother available meter (kWh2 meter). The RkVAh readings from thekWh2 meter can be used as reference or check meter considering therelationship of the two (2) meters and that it is also the optimal datathat can be used to resolve the issue. The said method alsocoincides with the above emphasized provision of ERB ResolutionNo. 95-21 as well as an essential basis in determining the veracity ofMr. Chan's claim that there is a reduction of the ice plant's operationduring the disputed period.

Using the data from MERALCO's Meter Reading Report, theCommission simulated the total energy consumptions (kWhconsumptions) of Mr. Chan during the disputed period by. using thelowest/worst power factor (simulation 1) and the average power factor(simulation 2) of the seven (7)-historical months prior to the saiddisputed period. The total energy consumptions for simulations 1 and2 are 320,014.57 kWh and 323,679.71 kWh, respectively. Theanalyses sequentially involve the determination of the power factorfor each month prior to the disputed periods [four (4) months] and thedetermination of the total energy consumption using the kVARhreadings retrieved from the kWh2 meter for the period of August 11,1998 to December 11, 1998. These are the readings that wereverified accurate and unquestioned. The details of the technicalanalyses are shown in Annex "A" of this Decision.

~


The basic principle of the above analyses is that the activeenergy (kWh) or PT consumed is directly proportional with thereactive energy (kVARh) or the QT consumed provided that powerfactor is constant. An increase in the reactive energy consumptionQT (it is more accurate to say that the power factor is more or lessconstant) shall also increase the active energy consumption PT, andvice versa.

By adopting the lowest/worst power factor (simulation 1) with anenergy consumption of 320,014.57 kWh, it was determined thatMERALCO had excessively billed Mr. Chan for the entire disputedmonths by 302,785.43 kWh. MERALCO excessively billed Mr. Chanwith an estimated total energy consumption of 622,800.00 kWh andmade him pay under protest the corresponding bill ofPhP2,020,727.83. Mr. Chan is therefore, rightfully entitled to a refundfrom MERALCO.

The amount to be refunded was calculated by determining thecorrect billing charges of Mr. Chan during the disputed period. Thebilling charges were then based on the computed energyconsumption using simulation 1 and the maximum demand (kW)consumption. Based on the computed monthly energy (kWh)consumption [the duration (hours per month) and the load factorwhich was indicated in the billing charges], the Commission was ableto determine the monthly maximum demand (kW) consumption of132.08 kW, to wit:

Energy (kWh)Maximum Demand = time (hour/month)

Load Factor (%)

80,003.64 kWhMaximum Demand = 720 hours

84.13%

I Maximum Demand = . 132.08 kW

The computation was also based on the rate prevailing duringthe disputed period. A summary of the computed billing charges areshown in Annex liB" of this Decision.

Amount Paid, PhPLess: A roved BillinDifference, PhP

2,020,727.831,069,411.87951,315.96

f


With the approval of the Billing Adjustment and thedetermination of the actual amount to be refunded, the Commission isnow constrained to resolve the incidental issue of whether Mr. Chanis entitled to a cost of money for the entire period which MERALCOerroneously withheld his money.

The Commission believes that, having already fully andexcessively paid his electricity bills for the September 11, 1998 toNovember 26, 1998 billing periods, Mr. Chan already incurred anopportunity cost of the money he used to advance and pay hiselectricity bills. The applicable rate to determine Mr. Chan's legalinterest rate should be six percent (6%) per annum, as embodied inArticle 2209 of the Civil Code of the Philippines, to wit:

"If the obligation consists in the payment of a sum ofmoney, and the debtor incurs in delay, the indemnity fordamages, there being no stipulation to the contrary, shallbe the payment of the interest agreed upon, and in theabsence of stipulation, the legal interest, which is sixpercent per annum. JJ

The said six percent (6%) interest rate is more in pointconsidering the nature of the obligation in favor of Mr. Chan, which isto indemnify him in full for the costs he incurred. The six percent(6%) legal interest rate shall be reckoned from the time of judicial orextrajudicial demand which, in this case commenced from the timeletter-complaint was filed on May 26, 1999. This is in consonancewith the ruling of the Supreme Court in the classic case of EasternShipping Lines, Incorporated vs. Court of Appeals7, wherein it washeld, that:

"x x x. With regard particularly to an award ofinterest in the concept of actual and compensatorydamages, the rate of interest, as well as the accrualthereof, is imposed, as follows:

1. When the obligation is breached, and itconsists in the payment of a sum of money,i.e., a loan or forbearance of money, theinterest due should be that which may have

_______ b_e_en_stipulatedin writing.Furthermore'd

7 234 seRA 78 (1994) {/


interest due shall itself earn legal interest fromthe time it is judicially demanded. In theabsence of stipulation, the rate of interestshalt be 12% per annum to be computed fromdefault, i.e., from judicial or extrajudicialdemand under and subject to the provisions ofArticle 1169 of the Civil Code.

2. When an obligation, not constituting a loanor forbearance of money. is breached, aninterest on the amount of damagesawarded may be imposed at the discretionof the court at the rate of 6% per annum.No interest, however, shall be adjudged onunliquidated claims or damages except whenor until the demand can be established withreasonable certainty. Accordingly. where thedemand is established with reasonablecertainty, the interest shall begin to runfrom the time the claim is made judiciallyor extrajudicially (Art. 1169, Civil Code) butwhen such certainty cannot be so reasonablyestablished at the time the demand is made,the interest shall begin to run only from thedate the judgment of the court is made (atwhich time the quantification of damages maybe deemed to have been reasonablyascertained). The actual base for thecomputation of legal interest shall, in anycase, be on the amount finally adjudged.(Emphasis supplied)

3. When the judgment of the court awarding asum of money becomes final and executory,the rate of legal interest, whether the casefalls under paragraph 1 or paragraph 2,above, shall be 12% per annum from suchfinality until its satisfaction, this interim periodbeing deemed to be by then an equivalent to aforbearance of credit." ~


Summarized below is the breakdown of the total amount to berefunded by MERALCO to Mr. Chan:

Amount Paid, PhPLess: A roved BillinDifference, PhPPlus: Legal Interest, PhP

I Total Amount to be Refunded, PhP

2,020,727.831,069,411.87951,315.96913,263.32

11,864,579.28 I

In computing the total amount of PhP1,864,579.28, theCommission used the following formula:

A=Px(1 +rt)

Where:

APrt

====

Total Accrued Amount (Principal + Interest)Principal AmountInterest Rate per YearTime Period Involved in Months or Years

And Where:

Prt

Thus:

AA

===

==

PhP951,315.966% per annum16 years

PhP951,315.96 x (1 + (0.06 x 16))PhP1,864,579.28

The total amount accrued (principal plus interest), from a simpleinterest on the principal amount of PhP951,315.96 at the rate of sixpercent (6%) per year for sixteen (16) years, is PhP1 ,864,579.28.

Allowing Mr. Chan to recover the principal amount ofPhP951 ,315.96 and an interest thereon of PhP913,263.32 are purelyreimbursements for the use of his money by MERALCO when thelatterfailed to refundhi~


This authority of the Commission to impose interest for the useof money emanates from its so-called incidental powers. Asdiscussed by the Supreme Court in C.T. Torres Enterprises,Incorporated vs. The Hon. Romeo J. Hibionada, Efren Diongon, andPleasantville Development Corporation8, it was held that:

'The argument that only courts of justice canadjudicate claims resoluble under the provisions of theCivil Code is out of step with ..the fast-changing times.There are hundreds of administrative bodies nowperforming this function by virtue of a valid authorizationfrom the legislature. This quasi-judicial function, as it iscalled, is exercised by them as an incident of the principalpower entrusted to them of regulating certain activitiesfalling under their particular expertise.

In the Solid Homes case for example the Courtaffirmed the competence of the Housing and Land UseRegulatory Board to award damages although this is anessentially judicial power exercisable ordinarily only bythe courts of justice. This departure from the traditionalallocation of governmental powers is justified byexpediency, or the need of the government to respondswiftly and competently to the pressing problems of themodern world."

Further, no statute can be enacted that can provide all thedetails involved in its application. There is always an omission thatmay not meet a particular situation. What is thought, at the time ofenactment, to be an all-embracing legislation may be inadequate toprovide for the unfolding events of the future. So-called gaps in thelaw develop as the law is enforced. One of the rules of statutoryconstruction used to fill in the gap is the doctrine of necessaryimplication. The doctrine states that what is implied in a statute is asmuch a part thereof as that which is expressed. Every statute isunderstood, by implication, to contain all such provisions as may benecessary to effectuate its object and purpose, or to make effectiverights, powers, privileges or jurisdiction which it grants, including allsuch collateral and subsidiary consequences as may be fairly andlogically inferred from its terms. The principle is expressed in themaxim, Ex necessitate legis or from the necessity of the law. Andevery statutory grant of power, right or privilege is deemed to include

8 G.R.No.80916,November9, 199~


all incidental power, right or privilege. This is so because the greaterincludes the lesser, expressed in the maxim, in eo plus sit, simperinest et minus. 9

Thus, when an administrative agency or body is conferredquasi-judicial functions, all controversies relating to the subject matterpertaining to its specialization are deemed to be included within itsjurisdiction since the law does not sanction a split of jurisdiction.1o

Finally, it bears stressing that, MERALCO, as a public utilityimbued with public interest, is expected to discharge its functions withutmost care and diligence. The utmost care and diligence required ofMERALCO necessitates such great degree of prudence on its part, andfailure to exercise the diligence required means that MERALCO was at faultand negligent in the performance of its obligation.11

Prudence dictates that, MERALCO, taking into considerationthe technical skills and expertise of its personnel, should have easilynoticed the absence of a meter reading when it prepared itsassessment for Mr. Chan's September 11, 1998 to October 12, 1998electric bill. Instead of calling the attention of Mr. Chan andconducting the necessary inspection and/or investigation within thepremises of the ice plant upon knowledge of such irregularity, it optedto bill Mr. Chan using the last recorded energy consumption readingfor the immediately preceding billing period. Worse, it applied thesame flawed procedure in its assessment for Mr. Chan's October 12,1998 to November 11, 1998 electric bill using again the last recordedenergy consumption reading and without even taking the necessarymeasures of rectifying the irregularities in its meter readings.

It is not remiss to emphasize that one of an electric utility'sliabilities is to provide and maintain in proper operative conditionthe necessary line or service connections, transformers (when sameare stipulated by the conditions of the contract between the parties

9 "Statutory Construction" by Ruben E. Agpalo, 2009 ed., pp. 254-255 citing Inre Dick, 38 Phil. 41 (1918); City of Manila vs. Gomez, GR. No. L-37251,August 31, 1981, 107 SCRA 98; Escribano vs. avila, GR. No. L-30375,September 12, 1978, 85 SCRA 245 (1978), also Go Chico vs. Martinez, 45Phil. 256 (1923); Gatchalian VS. COMELEC, GR. No. L-32560, October 22,1970, 35 SCRA 435 (1970); People VS. Uy Jui Pio, 102 Phil. 679 (1957), andChua VS. Civil SeNice Commission, 206 SCRA 65 (1992), quoting Agpalo,Statutory Construction, pp. 118-119 (1986 ed.), People VS. Aquino, 83 Phil.614 (1949)

10 Metropolitan Cebu Water District VS. Mactan Rock Industries, Inc., G.R. No.172438, July 4,2012

11 MERALCO VS. Ramoy et aI., G.R. No. 158911, March 4, 20~


thereto), meters and other apparatus which may be required forthe proper measurement of and protection to its service.12

Again, considering the technical skills and expertise involved inthe installation of kWh meters, MERALCO is expected to ensure thatthe same is properly installed. Unfort.unately, such was not the casein the subject complaints. MERALCO should have employed utmostdiligence necessary to warrant that the newly installed kWh meter inMr. Chan's ice plant is operating under normal condition as anydefect, either in the meter or installation thereof, cannot easily bedetected by Mr. Chan, more so, by an ordinary consumer.

What is unfathomable is that, despite Mr. Chan havingexcessively paid his electricity bills for the disputed billing periods,MERALCO imposed threats of service disconnection for itssubsequent billing adjustments for the same billing periods. Theforegoing circumstances are clear manifestations that MERALCOacted with malice and bad faith in its dealings with Mr. Chan, whichthe Commission cannot tolerate.

WHEREFORE, the foregoing premises, judgment is herebyrendered finding the Respondent Manila Electric Company(MERALCO) guilty of excessively billing the Complainant Mr. WilliamL. Chan during the periods September 11, 1998 to October 12, 1998,October 12, 1998 to November 11, 1998 and November 20 to 26,1998.

Accordingly, MERALCO is hereby directed to REFUND to Mr.Chan, within fifteen (15) days from receipt hereof, the total amount ofOne Million Eight Hundred Sixty-Four Thousand Five HundredSeventy-Nine Pesos and Twenty-Eight Centavos(PhP1,864,579.28) representing the difference between the amountequivalent to the approved billing adjustment and the amount that Mr.Chan paid under protest during the disputed periods, inclusive of alegal interest at the rate of six percent (6%) per annum and computedfor a period of sixteen (16) years.

Further, MERALCO is hereby held liable for negligence in theconductof its businessof distributionof electricityto Mr.Ch~

12 3rd paragraph, Section 45, ERB Resolution No. 95-21


Thus, a penalty of One Hundred Thousand Pesos(PhP100,000.00) is hereby imposed against it pursuant to Section 5,Article 11/of Resolution NO.3, Series of 2009 on the Guidelines toGovern the Imposition of Administrative Sanctions in the Forms ofFines and Penalties pursuant to Section 46 of Republic Act No. 9136,otherwise known as the Electric Power Industry Reform Act of 2001or the EPIRA13. MERALCO is directed to REMIT the said amount,either in cash or in check, in the name of the Energy RegulatoryCommission (ERC), within fifteen (15) days from receipt hereof.

SO ORDERED.

Pasig City, September 14, 2015.

ONIMO D. STA. ANACommissioner

JOSE V;;E'NTE B~SZZ~Chairman r

G~~Iit. YAP-TARUCcommiSSione~

ALF~ioNCommissioner

JOSEFINA PAT I A. MAGPALE-ASIRITCo missioner

13 Section 5. x x x. Any person who has been found to have committed aviolation of any provision of the Act and its IRR, the Philippine Grid andDistribution Codes (PGDC), rules, regulations, orders, resolutions and otherlaws the implementation and enforcement of which are delegated to the ERC,x x x., shall be subject to the following sanctions:

Additional Penalty Shall be

No. of Violation Basic Amount Imposed for Any Willfulof Penalty Delay in the

Implementation1SI and 2na Violation PhP100,OOO.OO x x x.

:ERC--~-F-' \\i Office afthe Chairman

Lc2015-004-02030 '_'i'.. . __ . :J


Copy Furnished:

1. Mr. William ChanComplainantNo. 537 Arnaiz Avenue, Pasay City .

2. Heffron Esguerra Dy and De Jesus Law OfficesCounsel for the ComplainantUnit 706, Tycoon Center,Pearl Drive, Pasig City

3. Manila Electric Company (MERALCO)RespondentLopez BuildingMERALCO CompoundOrligas Avenue, Pasig c~

SUMMARY OF DATA AND DISPUTED ENERGY CONSUMPTION COMPUTATIONI No Data Integrity

I

ANNEXA

1 12-Jan-1998 1 11-Feb-1998 12-Mar-1998 13-Apr-1998 l1-May-1998 ll-Jun-1998 10-Jul-1998 ll-Au!l-1998 1 ll-Sep-1998 I ll-Dec-1998 1 15-Mar-1999

Actual Meter 1Meter 1 IActive Energy (KWh) 1 116611 12391 13260 14249 15222 16350 17454 188261 202031 1Readings 1Meter 2 Iq-reading (RKVAh) 1 174491 18059 18813 19686 20542 21532 22496 237021 249201 260561 28041

C f 1Meter 1 IActive Energy (KWh) 1 1 730.00 1 869.00 I 989.00 1 973.00 1 1,128.00 I 1,104.00 1,372.00 1 1,377.00 1 Ionsump Ion .1 610.00 1 873.00 1 856.00 1 990.00 1 1,206.00 I 1,218.00 1 1,136.00 1I Meter 2 Iq-readmg (RKVAh) I 754.00 964.00 1,985.00

I with mulitplier of 120 (x120) I direct reading

Meter 1 IActive Energy (KWh) 1 I 87,600.00 1 104,280.00 118,680.00 I 116,760.00 1 135,360.00 1 132,480.00 1 164,640.00 1 165,240.00 I • 419,392.00 IActual

1 with mulitplier of 120 (x120)Consumption

Meter 2 Iq-reading (RKVAh) 1 1 73,200.00 I 90,480.00 I 104,760.00 I 102,720.00 1 118,800.00 I 115,680.00 1 144,720.00 1 146,160.00 I 136,320.00 1 238,200.00

Notes: 1) New meter was installed replacing the missing Meter 1 on Nov. 20, 1998 however, said new meter was found defective on Nov. 26, 1998, thus, integrity of KWh data during said period is in question;2) The new meter replacing Meter 1 is direct reading or it does not require any multiplier;3) Meter 2 was continuosly used and data was recorded even after replacing Meter 1; and4) • - consumotion based on MERALCO's etimates.

1 12-Jan-1998 1 11-Feb-1998 I 12-Mar-1998 1 13-Apr-1998 1 11-May-1998 1 l1-Jun-1998 I 10-Jul-1998 I l1-Au!l-1998 I 11-5ep-1998 I ll-Dec-1998 I 15-Mar-1999

Reactive Energy 1 1 33,948.20 1 44,271.22 1 52,446.50 1 51,199.42 1 59,028.29 1 57,088.39 1 72,053.31 1 73,369.67 I 1Power Factor I pf (%)1 1 93.24%1 92.05%1 91.47%1 91.58% 1 91.66%1 91.84%1 91.61%1 91.40%1 1

Computation forTotal Active Energy Consumption (KWh) for the period of Jan 12, 1998 to Aug 11, 1998 1 859,800.00 1Power FactorTotal Reactive Energy Consumption (KVARh) for the period of Jan 12, 1998 to Aug 11, 1998 1 370,035.33 1

Simulation 1: ILowest Power Factor for the period of Jan 12, 1998 to Aug 11, 1998 I 91.47%1Simulation 2: IAvraae. Power Factor for the period of Jan 12, 1998 to Aua 11, 1998 1 91.85%1

SIMULATION 1: I ll-Aug-1998 11-Dec-1998

~ctual a-readina (RKVAh) 1 23,702 26,056KWh consumption ~ctual q-reading wi mull. (x120) - (RKVAh) 1 2,844,240.00 3,126,720.00

of the disputed ~ctual Total q-reading (Aug 11, 1998 to Dec 11, 1998) 282,480.00

period using the Lowest Power Factor (Jan 12, 1998 to Aug 11, 199811 91.47%

lowest power 4-month KWh Consumption (Aug 11, 1998 to Dec 11, 1998) 320,014.57factor of the entire Monthly KWh Consumption (Aug 11, 1998 to Dec 11, 1998) 80,003.64

year No. of Disputed Months (Aug. 11, 1998 to Dec. 11,1998) 4

SIMULATION 2: I 11-Aug-1998 11-Dec-1998

~ctual a-read ina (RKVAh) 1 23,702 26,056KWh consumption ~ctual q-reading wi mull. (x120) - (RKVAh) 1 2,844,240.00 3,126,720.00

of the disputed ~ctual Total q-reading (Aug 11, 1998 to Dec 11, 1998) 282,480.00

period using the ~ve. Power Factor (Jan 12, 1998 to Aug 11, 1998) I 91.85%

average power ~-month KWh Consumption (Aug 11, 1998 to Dec 11, 1998) 323,679.71factor of the entire Monthly KWh Consumption (Aug 11, 1998 to Dec 11, 1998) 80,919.93

year No. of Disputed Months (Aug. 11, 1998 to Dec. 11,1998) 4

Page 12 of 13

ANNEX 8SUMMARY OF THE APPROVED CHARGES

~ Simulation 1 I I Simulation 2 I

WI Monthly Energy (KWh) II 80,003.64 I

WI Monthly Energy (KWh) II 80,919.931

ILoad Factor II 84.13%1 ILoad Factor II 84.13%1Monthly Demand (KW) I .

II 132.081Monthly Demand (KW) I .

II 133.591MaXimumDemand MaXimumDemand

I Monthly Power Factor-(%) II 91.47%1 I Monthly Power Factor (%) II 91.85%1

- Basic Charges IIConsumption I I Rates Amount.•...•..Energy (KWh) 80,003.64 1.92 153,606.99...• X

Co Demand (KW) 132.08 X 220.00 29,056.89Glrn Power Factor Adjustment 182,663.88 x -1.92% (3,507.15)0 Power Factor 91.47%•...•..

Currency Adjustment 179,156.73 4.24% 7,596.25.•.. xtil PPA 80,003.64 x 0.957 76,563.49::::I<{ I Sub-total Amount I 263,316.46 I-- IIConsumption I IN Basic Charges Rates Amount.•.. Energy (KWh) 80,003.64 x 1.92 153,606.99...•0 Demand (KW) 132.08 X 220.00 29,056.890 Power Factor Adjustment 182,663.88 -1.92% (3,507.15)0 x•.. Power Factor 91.47%.•...•.. Currency Adjustment 179,156.73 x 4.60% 8,241.21...•

PPA 80,003.64 0.990 79,203.61Co XGl

266,601.55 IrnI Sub-total Amount I

- Basic Charaes IIConsumotion I I Rates Amount.•...•.. Energy (KWh) 80,003.64 x 1.92 153,606.99:> Demand (KW) 132.08 x 220.00 29,056.890z Power Factor Adjustment 182,663.88 x -1.92% (3,507.15)0 Power Factor 91.47%•..N Currency Adjustment 179,156.73 4.58% 8,205.38.•.. x...• PPA 80,003.64 x 1.038 83,043.7800 I Sub.total Amount I 270,405.89 I-,....-

Basic Charges IIConsumotion I I Rates Amount.•...•.. Energy (KWh) 80,003.64 x 1.92 153,606.99U Demand (KW) 132.08 x 220.00 29,056.89GlC Power Factor Adjustment 182,663.88 x -3.12% (5,699.11)0 Power Factor 91.47%•...•..

Currency Adjustment 176,964.77 3.91% 6,919.32.•.. x:> PPA 80,003.64 x 1.065 85,203.880z I Sub-total Amount I 269,087.97 I

,....-Basic Charaes I IConsumotion I I Rates Amount.•...•..Energy (KWh) 80,919.93 1.92 155,366.26...• x

Co Demand (KW) 133.59 x 220.00 29,389.67Glrn Power Factor Adjustment 184,755.93 x -1.92% (3,547.31)0 Power Factor 91.85%•...•..

Currency Adjustment 181,208.62 4.24% 7,683.25.•.. xtil PPA 80,919.93 x 0.957 77,440.37::::I<{ I Sub-total Amount I 266,332.23 I-- Basic Charges IIConsumption I I RatesN Amount.•.. Energy (KWh) 80,919.93 x 1.92 155,366.26...•0 Demand (KW) 133.59 x 220.00 29,389.6700 Power Factor Adjustment 184755.93 x -1.92% (3,547.31)•.. Power Factor 91.85%.•...•.. Currency Adjustment 181,208.62 x 4.60% 8,335.60...•

PPA 80,919.93 0.990 80,110.73Co xGlrn I Sub.total Amount I 269,654.94 I-- Basic CharQes IIConsumotion I I Rates Amount.•...•.. Energy (KWh) 80,919.93 x 1.92 155,366.26:> Demand (KW) 133.59 x 220.00 29,389.670z Power Factor Adjustment 184,755.93 x -1.92% (3,547.31)0 Power Factor 91.85%•..N Currency Adjustment 181,208.62 4.58% 8,299.35.•.. x...• PPA 80,919.93 x 1.038 83,994.8800 I Sub.total Amount I 273,502.86 I-.•.. Basic Charges IIConsumption I I Rates Amount.•.. Energy (KWh) 80,919.93 x 1.92 155,366.26U Demand (KW) 133.59 x 220.00 29,389.67GlC Power Factor Adiustment 184,755.93 x -3.12% (5,764.39)0 Power Factor 91.85%•...•..

Currency Adjustment 178,991.55 3.91% 6,998.57.•.. x:> PPA 80,919.93 x 1.065 86,179.720z I Sub-total Amount I 272,169.84 I

Grand Total Amount 1,069,411.871 Grand Total Amount 1,081,659.871Page 13 of 13

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