ZAMBOANGA City Electric Cooperative, Inc. (Zamcelco) under the management of Crown Investment Holdings, Inc. (Crown Zamcelco) paid P150 million to Western Mindanao Power Corp. (WMPC) as part of its commitment to minimize outstanding arrears to the power generator.
The payment is part of the agreement between the power generator and electric cooperative will ensure the continuing provision of power to Zamboanga City for a period of 90 days. Zamcelco will also be paying an additional P80 million in security deposit on top of the P150 million payment.
Zamcelco paid the P150 million following a hearing at the Energy Regulatory Commission (ERC) on July 17.
Under the agreement, WMPC, a subsidiary of the Alsons Power Group, will continue to dispatch power to Zamboanga City upon Crown Zamcelco’s nomination and under the terms of the existing power sales agreement (PSA) entered into by the two parties in December 2015.
According to WMPC, the outstanding arrears to the power generator ballooned to more than P467 million as of February this year.
“Of Crown-Desco’s P2.5 billion capital infusion into Zamcelco, P370 million have already gone to WMPC,” said Zamcelco Chief Management Officer Henry Virola said in a statement.
In a statement, WMPC said on February 4 of this year, their 105 mega-watt (MW) bunker fuel-fired power plant in Sangali, Zamboanga City “ceased operations after reaching critical supply level and after Crown Zamcelco discontinued its nomination of power from WMPC.”
Alsons Power and WMPC Corporate Counsel Jun Mata said Zamcelco still owes WMPC around P97 million.
Zamcelco claims that WMPC has been overbilling them. The electric cooperative filed a motion with the Energy Regulatory Commision for a claim for refund of its overpayments. The motion stated that the overpayments were made as WMPC “overbilled the coop for capacity recovery fees, and operations and management.”
“WMPC charged Zamcelco for a fixed capacity of 50 megawatts (MWs), when Zamcelco would not use over 25 MWs a month. Without an effective PSA, WMPC should have only charged the cooperative for actual nominated or utilized capacity,” Virola said.
Virola said they are still waiting for the ERC’s decision on their motion for a claim for refund and for the dismissal of the application for Zamcelco-WMPC PSA’s approval.
“Everything that WMPC has charged Zamcelco is in the existing power sales agreement between the two parties. Their [Crown Zamcelco] contention of overbilling is just based on their belief that our PSA has not taken effect,” Mata said in an issued statement of the company last Thursday, July 18, 2019. (LHC with PR)