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Thursday, February 23, 2006
CPPC did not honor deal, Veco tells court
The Visayan Electric Co. (Veco) told the court yesterday its independent power producer did not honor a stipulation under a 1997 agreement to supply an agreed amount of electricity.
But this was because of the Cebu Private Power Corp.’s (CPPC) high rates, and not its ability to supply power.
With the CPPC rate imposed during the interim pricing scheme from June 2004 to November last year, Veco opted to avail itself of only 18 million kilowatt-hours. The power purchase agreement (PPA) states that CPPC supplies Veco with about 30 million kilowatt-hours.
Pricing scheme
The Energy Regulatory Commission granted an interim pricing scheme that provides an increase in the cost of electricity that CPPC was supplying Veco. The scheme, though, expired last Nov. 24.
With the expiration, CPPC and Veco were supposed to revert to their original PPA, wherein CPPC can only charge Veco two percent less than what the state-owned National Power Corp. collects per kilowatt-hour.
Veco took CPPC to court to make the power producer honor their agreement.
The CPPC had threatened to cut off supply to Veco.
The two firms, through their lawyers, met in court yesterday.
According to Veco’s first witness, Juan Antonio Bernad, chief financial officer of Veco, the PPA signed in February 1997 states that CPPC provide them with more than 30 million kilowatt-hours.
CPPC provides about 25 percent of Veco’s daily power supply.
Veco refused to extend the interim agreement to allow CPPC to charge higher rates for its supply.
“We cannot afford to damage or hurt the relationship with our consumers. We cannot sustain the additional cost if we don’t pass it on to our consumers,” Bernad told the court.
Bernad also said that in their current situation, they cannot force CPPC to honor the PPA.
Veco distributes power to some 225,000 households and more than 22,000 businesses in Metro Cebu. (JGA)
For Bisaya stories from Cebu. Click here. (February 23, 2006 issue)
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