ERC allows Zamcelco to recover franchise tax from consumers PDF Print E-mail
Saturday, 05 March 2011 15:10

The Energy Regulatory Commission (ERC) has authorized Zamcelco to collect from its member-consumers, the franchise tax imposed by the City Government of Zamboanga at the rate of PhPO.0136/kWh for a period of six years until such time that the amount of PhP31,789,055.23 shall have been fully recovered.

According to Zamcelco General Manager Reinerio R. Ramos, the authority is contained in the ERC Order received by his office on February 24, 2011 under ERC Case No. 2010-001 CF.

“Zamcelco has paid the total sum of P48,462,711.89 including interest charges and surcharges on January 2010 and April 26, 2010, respectively, and of this amount, Php32,637,131.00 is for the local franchise tax due for the periods 1998 to 2009,” Ramos said.

Having paid the same, the Coop filed an application before the Commission on May 18, 2010 seeking approval to pass onto the member-consumers for the amount paid using the Tax Recovery Adjustment Charge (TRAC) formula as provided for in Paragraph 2.1.2.1 of Art. II of the Guidelines Prescribing the Tax Recovery Mechanism in the Rates of Electric Cooperatives.

Zamcelco also complied with the pre-filing requirements in accordance with the ERC Rules of Practice and Procedure, and having found the Coop’s application sufficient in form and substance, an Order and Notice of Public Hearing were issued by the Commission setting October 19, 2010 as the date of public hearing.

In the said ERC Order, which was signed on November 15, 2010, the Commission initially computed the TRAC for a period of six years as against the Coop’s proposed recovery period of six months, if only to mitigate the impact of the franchise tax on the member-consumers

The ERC finally approved with modification, the ZAMCELCO’s application for approval of tax recovery adjustment mechanism (TRAM) in the rates and the authorization to collect from member-consumers the amount of Php 0.0136/kWhr spread in a six-year period effective in the March 2011 billing period.