In the dense urban landscape of the Philippines, sub-metering has become a standard practice in apartments, condominiums, and "bedspace" rentals. While intended to provide a fair way to distribute utility costs, it frequently becomes a flashpoint for disputes when landlords impose rates significantly higher than those billed by the Distribution Utility (DU), such as Meralco or regional electric cooperatives.

Under Philippine law, the resale of electricity by a non-utility entity is strictly regulated. When a landlord profits from electricity charges, they transition from a lessor to an unauthorized electricity reseller, triggering significant legal liabilities.

1. The Statutory Foundation: EPIRA and ERC Mandates

The primary legislation governing electricity in the country is Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA). Under this law, the Energy Regulatory Commission (ERC) is the sole body empowered to regulate electricity rates.

Prohibition on Profit: Landlords are not "Distribution Utilities." Therefore, they are legally prohibited from adding a "markup" or "service fee" to the cost of electricity.
The "Pass-Through" Principle: The ERC maintains that electricity charges in a sub-metered setup must be a "pass-through" cost. This means the landlord can only charge the tenant the actual rate billed by the utility provider, proportionate to the tenant's consumption.

2. The Rental Reform Act of 2009 (R.A. 9653)

While primarily known for regulating rent increases, Republic Act No. 9653 also reinforces the tenant’s protection against exploitative utility billing. The Act prohibits the demand for excessive "other charges." If a landlord compels a tenant to pay electricity rates that exceed the official billing of the utility provider, it can be argued as a violation of the fair rental practices envisioned by the law.

3. Identifying Illegal Sub-metering Practices

A landlord is likely in violation of Philippine law if any of the following occur:

The Flat Rate Trap: Charging a fixed monthly amount for electricity regardless of actual usage, unless specifically agreed upon in a contract that favors the tenant (which is rare).
Administrative Markups: Adding "maintenance fees" or "reading fees" specifically to the electricity bill.
Using Higher Brackets: Charging all tenants the highest per-kWh rate of a tiered billing system, even if the total consumption of the building hasn't reached that tier.
Uncertified Meters: Using sub-meters that are not calibrated or sealed by the ERC or an authorized laboratory.

4. Legal Remedies for Tenants

If a tenant suspects overcharging, the law provides several avenues for redress, ranging from administrative complaints to civil litigation.

I. Administrative Complaint via the ERC

The ERC’s Consumer Affairs Service (CAS) handles disputes regarding overbilling. Tenants can file a formal complaint if the landlord refuses to align rates with the actual utility bill. The ERC has the authority to order a refund of the overcharged amounts.

II. Action for Sum of Money and Damages

Under the Civil Code of the Philippines, a tenant may sue for "Collection of Sum of Money" to recover the excess payments made under the principle of solutio indebiti (payment by mistake). If the overcharging was done with bad faith or malice, the tenant may also claim:

Moral Damages: For the mental anguish caused.
Exemplary Damages: To set a public example against such predatory practices.
Attorney's Fees.

III. Small Claims Court

For most residential tenants, the overcharged amount may fall within the threshold of Small Claims (currently up to ₱1,000,000 in Metropolitan Trial Courts). This is an expedited, inexpensive process where lawyers are not allowed during the hearing, making it accessible for the average renter.

5. Procedural Steps for Legal Action

Demand Letter: Before filing any case, the tenant (or their counsel) must send a formal Letter of Demand. This requests the landlord to cease overcharging and refund the accumulated excess. This is a jurisdictional requirement for many court actions.
Barangay Conciliation: Since most landlord-tenant disputes involve parties living in the same locality, the case must generally go through the Lupong Tagapamayapa for mediation. If no settlement is reached, a "Certificate to File Action" will be issued.
Documentation: The strength of the case relies on:

Copies of the landlord’s primary bill from the utility provider (e.g., Meralco).
Receipts or "chits" issued by the landlord for electricity.
Photos/records of sub-meter readings.

6. Penalties for Landlords

Landlords found guilty of unauthorized electricity resale or overcharging may face:

Administrative Fines: Imposed by the ERC for violating the EPIRA.
Refund Orders: Often with legal interest (currently 6% per annum).
Business Permit Revocation: Local Government Units (LGUs) can revoke the business permit of a lessor for violating national laws and consumer protection standards.

Conclusion

In the Philippines, the law views electricity as a basic necessity, not a commodity for landlord profit. Sub-metering is a convenience allowed for the distribution of costs, not a loophole for revenue generation. Tenants are encouraged to be vigilant, demand transparency in billing, and utilize the Small Claims system or the ERC to check predatory practices. Landlords, conversely, should ensure that every centavo charged to a tenant is backed by an official statement from the distribution utility.