A REIMBURSEMENT of a P0.30-centavo per kilowatt-hour that Power Sector Assets and Liabilities Management (Psalm) cut from the residential consumers is being pushed anew by the Central Negros Electric Cooperative, Incorporated (Ceneco).

The letter was addressed to Jose C. Ibazeta, president of Psalm, said Ceneco General Manager Sulpicio C. Lagarde, Jr.

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The cooperative's management appealed Wednesday for an intervention of solons, local government officials and the Social Action Group (SAC) in Negros Occidental "to compel Psalm to quicken the Mandatory Rate Reduction (MRR) reimbursement," which amounts to P7.2 million.

The said amount was for the billing month of November 2009, Lagarde noted. He said in a press statement that the reimbursement is mandated under Section 72 of the Epira Law of 2001.

Lagarde's letter of appeal was sent to Representatives Julio A. Ledesma IV, Jose Carlos V. Lacson, Jeffrey P. Ferrer, Monico O. Puentevella, also the mayors of the different cities and municipalities covered by Ceneco.

National Power Corporation (NPC) deducts the MRR from its power bills to Ceneco and other Distribution Utilities (DUs), subject to Psalm's reimbursement, Lagarde cited.

He said: "When Palinpinon Geothermal Power Plant in Negros Oriental was privatized, Green Core Geothermal Incorporated (GCGI) became the successor generation company and, subsequently, the Transition Supply Contract (TSC) of Ceneco with NPC which will expire on December 26, 2010 was ceded to GCGI on October 26, 2009.

Further, Lagarde said in the November 2009 power bill of Ceneco, GCGI loaded the MRR (P7.2 million) instead of advancing the same.

Ceneco advanced the MRR because GCGI opted to avoid Psalm, said Lagarde, adding that the management even protested against GCGI's move but to no avail.

Lagarde said for Ceneco's December 2009 power bill, GCGI again loaded the MRR amounting to P6.3 million.

Ceneco made an appeal earlier with Psalm to reimburse the P7.2 million before the December 2009 power bill fell "because Ceneco could no longer afford to advance another P6.3 million for the December MRR."

Since doing so would total the advances to P13.5 million, stressed Lagarde "but despite the appeal, no favorable response from Psalm was received."

Lagarde said last January 8, Psalm responded to his appeal with a long list of "never-before discussed requirements that could not possibly be met before the December 2009 power bill falls due on January 15, 2010."

Also in his letter to Ibazeta, Lagarde appealed for his understanding of Ceneco's inability to advance the MRR for the second time, adding that Ceneco will be left with no choice "but to pass-on the MRR directly to the consumers to stop the unnecessary and non-programmed advances to the detriment of the electric cooperative's planned projects and personnel benefits for 2010."

Lagarde further explained that Ceneco is not alone in this predicament citing other electric cooperatives with Transition Supply Contracts being ceded to the Green Core Geothermal, Incorporated "are similarly bleeding financially because government institutions mandated to protect the ECs failed to act pro-actively."

Lagarde added that "Other ECs were forced to pass-on the MRR burden to the residential consumers with the intention to refund immediately as soon as Psalm remits the reimbursement, an act which Ceneco is tempted to follow."

Courtesy copies of the letter were provided to Psalm, Energy Regulatory Commission (ERC), National Electrification Administration (NEA) and Philippine Rural Electric Cooperatives Association (Philreca), said Lagarde.


Psalm Corporation hopes to hit the 70-percent privatization threshold for the independent power producer (IPP) contracts in the Luzon and Visayas grids this year.

At present, Psalm was able to privatize 44 percent of the IPPs contracted capacity.

Psalm has completed the privatization of the 1,000-MW Sual and 700-MW Pagbilao power facilities last year.

The government expects to generate P13 billion from the privatization of the contracted capacities of the Napocor IPPs. (With PNA)