KALIBO, Aklan — An official of the Aklan Electric Cooperative (AKELCO) has denied that the power distribution utility was suffering from financial losses.
General Manager Chito Peralta, in a press conference Friday, contradicted a report by an independent auditing firm, which said AKELCO was losing money.
In a four-page report dated March 8, 2013, the Balicas, Lamboso & Co. said AKELCO has incurred net losses of P78,545,724 in 2011 and P23,856,523 in 2012.
In 2011, AKELCO spent P1,573,714,428 and earned P1,636,299,235, and in 2012, it spent P1,935,486,682 and earned P1,944,233,406, the auditing firm said.
Since operating in 1972, AKELCO incurred accumulated losses of P752.4 million in 2011 and P760.4 million in 2012 due to its inability to absorb financing costs, it said.
AKELCO’s liabilities also exceeded its assets by P107.2 million in 2011 and P107.3 million in 2012, showing uncertainty in the cooperative’s ability to recover and improve its operations and liquidity status, the Balicas, Laboso & Co. added.
The audit report was misleading, according to Peralta. Citing AKELCO records, he said they saved P35 million in 2011 and P54 million in 2012.
Peralta explained that the auditor used an auditing procedure that puts the reinvestment fund for sustainable capital expenditure (RFSC) as part of the members’ equity or contribution to the capital instead of the income, increasing AKELCO’s liability.
But based on the formula of the National Electrification Administration (NEA) and the Energy Regulatory Commission (ERC), the RSFC is revenue, since it is part of the customers’ bill, he said.
The RFSC is separated from the general fund and is being deposited to another account for the purchase of materials like electrical posts and lines, and equipment, Peralta said.
He said AKELCO collects it because ERC does not give the cooperative the power to collect charges on its depreciative assets counted as expenses, which resulted to the losses.
Peralta said ERC and NEA were basing their evaluation of the cooperative’s financial standing on cash-basis regulation, while the auditing firm bases it on accrual system.
AKELCO is financially stable, Peralta stressed. Currently one of the top 50 electric cooperatives in the country, it was given an AAA status by NEA last year, he said. (By Ernan Baldomero)
Source: Panay News