Hearing on P192M power cooperatives pact set

THE Energy Regulatory Commission (ERC) has scheduled the initial hearing of the approval of the settlement agreement between Central Negros Electric Cooperative (Ceneco) and Panay Energy Development Corporation (PEDC) on January 24.

The expository presentation, pre-trial conference and evidentiary hearing are set at 8:30 a.m. at Ceneco's main office at Gonzaga-Mabini Streets, Bacolod City.

Ceneco and PEDC have asked ERC to approve the terms of the settlement agreement between them, authorizing PEDC to charge and collect from Ceneco P192,064,798.50 in electricity fees and authorizing Ceneco to pass the full amount to its consumer members.

The electricity fees amounting to P192 million includes the Commission-approved testing and commissioning rate for other PEDC customers (for the billing periods of December 26, 2010 to March 25, 2011); and the Commission-approved commercial operations rate for other PEDC customers (for the billing periods March 26, 2011 to August 16, 2011).

On December 21, 2010, while negotiations were ongoing for the Electric Power Purchase Agreement (EPPA) between them, Ceneco wrote to PEDC requesting the latter to make available 24 megawatts of capacity beginning December 26, 2010.

Ceneco general manager Sulpicio Lagarde Jr. said they requested PEDC to supply them power since their contract with National Power Corporation was about to expire and they would have no power to supply their consumers for several months.

Since at that time, the power connection of PEDC from Panay to Negros was not yet operational, so it found ways to provide replacement power to Ceneco through its sister company the Cebu Electric Development Corp. in Cebu, he said.

Lagarde recalled that in 2007, Ceneco entered into a power supply contract with Kepco-Salcon Power Corp. for 40 MW. The delivery period of the contract was March 2011, he said.

Lagarde said that when he joined Ceneco, the electric cooperative's contract with NPC was about to expire on December 25, 2010. So there was a gap of several months from December 26, 2010 up to March of 2011, he said.

If they did not get power outside of KEPCO they would have no power to deliver to their consumers for about five months, he added.