The Energy Regulatory Commission (ERC) has tapped mid-tier accounting and advisory firm Roxas Cruz Tagle and Co., a member company of BDO International Ltd., to be its third party consultant in the audit of refunds carried out by power utility giant Manila Electric Company.
The regulatory body noted in a media statement that the consulting firm “submitted the highest rated and responsive bid,” hence, the Commission approved the recommendation of its bids and awards committee (BAC) to engage the company for the specified scope of work.
“The ERC resolved to engage the services of an independent party to verify whether the Meralco reported refunds have been fully accounted for, returned or credited to customers,” the regulatory agency emphasized.
ERC Chairperson Agnes T. Devanadera similarly noted that the chosen consultant “complied with all the legal, technical and financial requirements for the said procurement project.”
The audit process to be worked on by the consulting firm will delve with the refunds that had been ordered for Meralco to undertake in previous years – primarily those relating to bill deposit, meter deposit and income tax.
Devanadera said “the impending audit of Meralco refunds will ensure that what was due to the consumers has been actually returned or credited to their accounts and truly benefited them.”
The ERC added it has been a prudent step for it “to engage the services of a consultant, who has the technical expertise and the capability to conduct an independent audit and verification of all refunds of Meralco,” citing the prevailing limitations of the Commission when it comes to manpower that could scrutinize the refund processes implemented by the country’s biggest power utility firm.
ERC has previously considered tapping the help of the Commission on Audit (COA) on re-validating the mandated Meralco refunds, but the regulatory agency shifted instead into engaging a third party private consulting firm.
It has to be noted that in the 2003 ruling of the Supreme Court, it ordered Meralco to refund up to P30 billion to its qualified customers – that was in view of the court’s verdict that income tax shall not be treated as component of the rate base being passed on by the utility firm on its billings.
In 2012, another order has likewise been rendered by the ERC on bill deposit adjustment which entails refund of excess deposit or the customer has to top up the deposit if inadequate; and another ruling on P2.8 billion worth of meter deposit pay-back was laid down in 2008.
The regulatory body indicated that for the audit arrangement, the consulting firm will have to conduct complete audit of the books, records and accounts of Meralco.