ERC to audit ‘reinvestment fund’ of electric cooperatives


The Energy Regulatory Commission (ERC) will be auditing the collection and utilization of the ‘reinvestment fund for sustainable capital expenditures’ (RFSC) of the electric cooperatives (ECs), to assess if these have been in accordance with the prescribed tariff-setting rules.


ERC Chairperson Agnes T. Devanadera announced that the regulatory body engaged the services of a consultant with technical expertise and capability to scrutinize the RFSC utilization of the ECs.

ERC Chairperson Agnes T. Devanadera


She said the contract of the third party auditor Reyes Tacandong & Co. has already been awarded, hence, the audit process on the electric cooperatives’ RFSC will already be slated.


“The bidding process has been completed and the contract has been awarded to the winning bidder,” the ERC chief stressed.

The regulatory body qualified that it sought the assistance of a consultant in the audit and verification of the RFSC “to complement the agency’s evaluation efforts” of that electric bill component of the power utilities.


“We are duty-bound to promote and protect the consumers’ interest,” Devanadera said; while noting that the RFSC audit “will establish whether the ECs’ collection and disbursements indeed benefitted the consumers.”


Based on prescribed rules, the electric cooperatives were authorized to collect members’ contribution for capex, which is also known as the RFSC, and the collected amounts are intended to “fund the amortization or debt service” of the ECs.


The debt facilities that could be settled with the RFSC collections include those on expansion projects, rehabilitation as well as upgrading of the existing electric power system of the ECs.


The specified projects of the power utilities that could be amortized with the RFSC collections, according to the regulatory body, must be established that these are based on the capex plan applied for by the ECs and as duly approved by the ERC.

The RFSC collection is integrated in the rate-setting prescribed for ECs, therefore, it is crucial that these are verified and validated to ascertain if these have been prudently spent on projects used in servicing consumers.