Wednesday, May 31, 2006
Power coop posts P686M losses, P1.4B in liabilities
* Ceneco president Ed Guillem says these losses and liabilities were incurred by the coop in its almost 25 years of operation
THE Central Negros Electric Cooperative (Ceneco) has accumulated losses amounting to P686,772,863 at the beginning of 2006. It has also posted P1,475,725,392 in liabilities.
The report is contained in the Treasurer's Report rendered by Gerardo S. Solas, treasurer of the coop's Board of Directors.
Ceneco president Ed Guillem said the losses and liabilities were incurred by the coop in its almost 25 years of operation.
He however said in terms of income before the depreciation expense, Ceneco has posted P40,418,894 last year or P18 million higher compared to 2004 which amounted to P21,480,437.
In an audited report by the C.B. Fuestesfina and Company, Ceneco's Statement of Income and Accumulated Losses indicated that in 2005, the Sales of Energy (SOE) totaled to P2,129,608,720 that include services extended to residential, commercial and industrial, public buildings, primary metering and public streets and highways.
Last year, the SOE only reached P1,862,514,160.
As to the expenses - comprised of cost of power, transmission and distribution, consumers' account and administrative and general - the coop incurred a total of P2,099,702,473 in 2005. In 2004, it only spent P1,844,933,367.
The income from operations, on the other hand, showed that Ceneco had P29,906,247 in 2005 or about P12 million higher compared to P17,580,793 in 2004.
While, on the net loss, Ceneco had P67,547,084 last year or P15.5 million less than the 2004 figure which is P83,077,398.
As to the current liabilities, the coop listed the following: notes payable - P30,000,000; accounts payable to power - P228,765,821; current portion of long-term debt -P58,696; accrued interest and other payables - P49,648,726; due to other electric cooperatives - P3,628,249 and consumers' deposits - P166,160,856.
It also indicated the members' equity and liabilities that include: members' contribution - P628,861; donated capital - P412,039,109; reserve for reinvestment in utility plant - P514,291,072 and revaluation increment in utility plant - P756,064,240.
Meanwhile, Ceneco has also loans condoned and assumed by the governor through the Power Sector Assets and Liabilities Management Corporation (Psalm), which amounted to P309,906,369.
As to the Statements of Cash Flows, it shows a net decrease of about P4,762,072 but has a cash and cash equivalents at the beginning of the year of P101,332,325 and cash and cash equivalents at the end of year, that include the cash on hand and petty cash fund as well as cash in banks, of P96,570,253.
On the other hand, expenses on the transmission and distribution in 2005 totaled to P77,021,076 as extracted from the following: overhead lines - P35,825,966; consumer installation - P11,396,880; supervision and engineering - P9,165,948; meter expenses - P7,919,284; station expenses - P1,888,106; street light and signal system - P1,189,716; line transformers - P969,703; rent - P3,200 and miscellaneous - P8,662,273.
For consumers' accounts, Ceneco has P39,886,560 as extracted also to consumer records and collection-P27,732,773; meter reading - P11,004,120; supervision -P396,318; information and advertisement - P121,290 and miscellaneous consumer service - P632,059.
On the accrued interest and other payables, the coop posted P49,648,726; sum of account payables to suppliers -P17,306,082; accrued retirement payable - P13,535,767; accrued interest payable - P3,502,821 and other payable and accrued expenses - P15,304,056.
Expenses for administrative and general reached P78,981,762.
Other payments made are: employees' pension and benefits - P49,851,692; administrative and general salaries - P8,949,476; outside service employed - P7,549,849; office supplies - P4,274,815; injuries and damages - P2,129,416; officers' allowance and benefits - P1,695,164; maintenance of office and general plant - P1,502,938; training - P513,146; travel - P506,786; property insurance - P335,937; association and membership dues - P73,633; rent - P21,200 and miscellaneous expenses - P1,577,710.
Meanwhile, as to the National Electrification Administration (NEA) loan adjustment, Ceneco paid P5,266,777 in 2005 as well as for the salary differential of its employees and officials amounting to P260,230.
Despite the standing losses of about P684 million, the Ceneco still reduced its power rates for this month of May.
As per approval by the Energy Regulatory Commission (ERC), rates for May, excluding expanded value added tax and other adjustments, are now P5.4178 per kilowatt hour (kph) for residential users and P5.3502/kph for small commercial establishments.
For large commercial firms, they will be paying P5.3975/kph, while primary metering is charged P5.1750 and street lights, P5.6611.
Last April, rates were about 10 to 20 centavos higher, with residential users paying P5.5890; small commercial firms, P5.5272; large commercial firms, P5.3975; primary metering, P5.1750; and street lights, P5.6611.
Linda Taquiso, officer-in-charge of Ceneco's meter reading and billing section, explained that their monthly rates vary as these will also depend on the monthly charges of the National Transmission Commission (Transco) and the General Corp. (Genco) to Ceneco.
Taquiso also said the monthly system loss also affects the monthly rates.
Records showed that for this year, Ceneco's system loss from January to April was nailed at an average of 13 percent.
She said adjustment on monthly rates is still subject for review and approval of the energy commission.
Taquiso also reiterated the "subsidy for the poor" discounts, or the discounts for residential accounts with consumption of below 81 kilowatts (kWs).
Those that consume 71 to 80 kWs monthly can avail themselves of a five percent discount, while those with 61 to 70 kilowatts, a 10 percent discount.
For consumption of 51 to 60 kWs, the discount is 20 percent, for 46 to 50 kWs, 25 percent; 41 to 45 kWs, 30 percent; 36 to 40 kWs, 35 percent; 31 to 35 kWs, 40 percent; 26 to 30 kWs, 45 percent; and 25 kWs and below, 50 percent.
With the discounts, Taquiso said some of Ceneco's member-consumers are paying only P10 or even P2.50 monthly.
"This is the good thing that Ceneco offers to our customers because we don't have any flat rate unlike three years ago at P29," she said.
However, she said as a consequence, Ceneco has been "terribly" losing for years now.
This as she explained that 89 percent of the coop's net income goes to the payment of cost of power, while the rest go to system loss and overhead expenses.
For now, she said Ceneco is trying to stop the financial bleeding through income from connection and reconnection fees, service charge, line extension service, among others.
She also said in terms of manpower, they have no choice but to go for labor contracting and outsourcing.
"People should understand that Ceneco is not a profit-oriented firm and that the government is the one mandating all what to do and what not do. It's really hard but we don't have any choice but to face this reality and help Ceneco be competitive in order to survive," Taquiso said. (EASD)
(May 31, 2006 issue)
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