The government will have to forfeit first the unclaimed tax refund of Manila Electric Co. customers amounting to P4.289 billion in favor of the state before it can be used to reduce the power rates, the power retailer said.
Meralco said there was no law and jurisprudence that dealt squarely with the treatment of the unclaimed Supreme Court-ordered tax refund. It issued the position in compliance with the manifestation and motion to the Energy Regulatory Commission regarding the implementation of the tax refund.
ERC directed Meralco in February to submit a proposed scheme that incorporates the P4.289-billion unclaimed tax refund for purposes of reducing the distribution rates of its customers.
Meralco said the unclaimed tax refund had similarities with unclaimed balances and unclaimed refunds under Presidential Decree No. 679 and Republic Act 8234, which states that unclaimed balances and refunds should be forfeited in favor of the government, based on the principle of escheat.
Meralco also said ERC Resolution No. 12 series 2016 states that with respect to the unclaimed meter deposits, “upon the lapse of the schedule of refund, all unclaimed meter deposits including accrued interest shall become the subject of an escheat proceedings in the Regional Trial Court where the bank is located, and thereafter, declare the unclaimed meter deposit, after due notice and hearing, escheated in favor of the state.”
Meralco said that under the Murang Kuryente Act, a legislative act is deemed necessary to utilize what is already deemed as government share or fund realized from the Malampaya natural gas project in order to reduce retail power rates by applying it as payment for stranded contract costs and stranded debts of National Power Corp. and the Power Sector Assets Liabilities Management Corp.
“In this case, the unclaimed SC refund is not even a government share/fund yet, not until it has been escheated in favor of the government,” the company said.
Meralco said its motion was not interposed for delay and that any action to utilize the unclaimed SC refund to reduce the rates of customer should be made via a separate application where the Solicitor General or his representative could be represented or at the very least, with the concurrence of the Solicitor General or his representative, in behalf of the Republic of the Philippines.