Veterans Memorial Medical Center (VMMC) has sent the PNP three demand letters seeking payment but the bill remains unpaid, hospital director Antonio Sison said in a letter sent last month to PNP chief Director General Arturo Lomibao.
Sison said the P1.7 million is for the cost of water and electricity used during Estradas stay there from May 2001 to October 2003.
Estrada was detained there along with his son, Sen. Jinggoy Estrada, one of his co-accused in his corruption trial.
Sison sent two demand letters in 2003 on July 28 and Nov. 14 and one on July 2 this year.
Estrada was transferred by the PNP to Camp Capinpin, a Philippine Army training facility in Tanay, Rizal, in October 2003 because of an unspecified "imminent threat" to his life.
In July 2004, the Sandiganbayan anti-graft court granted Estradas petition to put him under "resthouse arrest" at his sprawling villa just across Camp Capinpin.
His lawyers are now requesting the Sandiganbayan to grant Estrada a "house arrest" at his posh home in North Greenhills Subdivision in San Juan so he could more easily meet with witnesses in preparation for taking the witness stand in his trial.
Prosecutors, who had opposed an earlier bid by Estrada for house arrest, objected and said the former president should be detained at the VMMC.
"What possible harm can we do if we could interview our client in San Juan?" asked lead defense lawyer Rene Saguisag.
Saguisag also cited the cost the government would incur if Estrada were again detained at the VMMC and presented Sisons letter to the court.
Saguisag also expressed fears that conversations with their client would be eavesdropped at the VMMC.
Estrada critics opposed a house arrest for Estrada in the past, saying it was tantamount to preferential treatment.
Estrada was ousted by a military-backed popular uprising in 2001 and replaced by President Arroyo, who was then vice president.
Prosecutors accuse Estrada of amassing more than P4 billion during his 31-month rule and stashing the proceeds in a secret local bank account during his 31-month presidency. Estrada denies the charges.
Under law, Estrada could get the death penalty if convicted.
Estrada maintains he was illegally ousted from the presidency and still enjoys immunity from suit.