Benitez assures help for House inquiry on overpricing, other woes at Ceneco

NEGROS Occidental Third District Representative Francisco “Kiko” Benitez has assured help to push for a congressional inquiry on alleged overpricing and other power woes hounding the Central Negros Electric Cooperative (Ceneco), a consumer group leader said.

Power Watch Negros Advocates Secretary-General Wennie Sancho, who met with Benitez Monday, June 14, 2021, said the Negrense lawmaker will discuss the matter with Pampanga Representative Juan Miguel “Mikey” Arroyo, who chairs the Congress’ committee on energy.

Sancho said Benitez might ask Arroyo to sponsor a resolution seeking for an inquiry at the Lower House as soon as the session resumes in August this year.

“It’s a major welcome development,” the consumer group leader added.

As he thanked the congressman’s immediate response to the concern they raised, Sancho said this inspires Power Watch Negros to continue advocating for the rights and welfare of the consumers in the power industry.

“He [Benitez] understands the plight of the [electric] consumers. He, himself, has expressed concern over frequent power interruptions in the province,” Sancho also said.

On June 8, Power Watch Negros sought the help of Benitez in its bid to seek a congressional inquiry on various concerns against Ceneco, including "overpriced" contracts.

In a letter and position paper sent to the congressman, a copy of which was obtained by SunStar Bacolod, the consumer group requested the Negrense solon to examine the group's position paper relevant to their request for a congressional inquiry on issues concerning the plight of the consumers of the electric cooperative.

Sancho said they took the initiative in light of the present controversies in Ceneco involving power supply agreements.

"Power Watch believes that only a congressional inquiry could result in a full disclosure into allegations of overpricing, over contracting and other irregular practices that result in the unabated power rate increase at the expense of Ceneco consumers," he added.

Ceneco caters to the largest number of electric consumers in Negros Occidental.

In Third District alone, the power distribution utility caters to the cities of Talisay and Silay, and Murcia. Other areas it covers included the cities of Bacolod and Bago, and the town of Salvador Benedicto.

The consumer group said their request for a congressional inquiry will include possible over-contracting in the past.

But its main concern is the recently aborted awarding of power sales contract to the lowest calculated bidder after the conclusion of the Competitive Selection Process (CSP) last April 12 by the Third Party Bids and Awards Committee (TPBAC).

The position paper stated that the Ceneco Board did not take action on the recommendation of the TPBAC on the result of the bidding with the lowest calculated bid of P3.2929 per kilowatt-hour (kWh) for a 20-megawatt (MW) power contract.

Instead, it said, some members of the Board chose to accept the "short-extension" of the existing 40 MW contract at a reduced capacity of 20 MW at a price of P5.28 per kWh with the same power generation utility, the Kepco Salcon Power Corp. (KSPC).

Based on Power Watch's calculation, the difference between the contracted cost of P5.28 and the lowest calculated bid of P3.29 is P2.29 per kWh.

If multiplied by 14,400,000 kWh, or equivalent to 20 MW, this would cost about P32.98 million per month or P395.71 million in one year.

"Ceneco should have spared us from paying the additional financial burden if the Board had faithfully complied with the recommendation of the TPBAC," Sancho said, asking that "what is the reason of the members of the Board who voted for the short-term extension, a decision that is grossly disadvantageous to the consumers."

The position paper further stated that the amount of P395.71 million will pump prime the local economy particularly in the cities and municipalities covered by the franchise of Ceneco.

These millions of pesos could induce the circulation of money as it would increase consumer spending that would hasten the recovery of the economy as more business establishments will reopen and jobless workers will return to work amid the pandemic, it added.

Sancho, in a separate statement Monday, added that the consumers are being penalized P1 million per day for the decision of the Ceneco Board.

Citing the Board’s legal and moral liabilities, he stressed, “when the Board members make a wrong decision, cost implications should not be passed to the consumers.”

The concern on the alleged overpriced extended power sales contract between Ceneco and KSPC was already raised by Power Watch to the Department of Energy (DOE).

For his part, Ceneco acting general manager and project supervisor laywer Dan Pondevilla welcomed such a move, saying that he sees no problem with the consumer group raising the matter to the agency as well as pushing for a congressional inquiry.

"It is better to have an inquiry so at least everybody can be heard," he said, adding that "[there was] no overpricing primarily because all rates were approved by the Energy Regulatory Commission (ERC)."

On May 26, Pondevilla confirmed that the power distribution utility accepted the earlier offer of KSPC for a one-year extension of their power contract.

Pondevilla, however, said the extension should be at a reduced capacity of 20 MW or half of the 40 MW that was previously contracted by Ceneco with the KSPC for 10 years.

"This is the most practical and beneficial on the part of the consumers. Contracting just 20 MW, and not 40 MW, will enable us to maximize our supply and reduce our power rates," he said, reiterating that based on the utility's power supply plan "what we need is just 20 MW."

Backing this, Ceneco president Jojit Yap earlier explained that they opted to push through with the extended contract with KSPC because it will already expire pending the decision of the DOE on the query of the consumer group.

"We cannot just rely on the Wholesale Electricity Spot Market (Wesm) as the cost of power there goes up and down," she added.

Yap said there was no overpricing as the cost was still based on the existing contract with KSPC.

"Though there was already a bidding, the Board acted to the concern raised by Konsyumer-Negros by forwarding it to the DOE," she said, adding that though the agency has acknowledged the receipt of the concern, it has yet to answer on the matter.

Moreover, the consumer group said that aside from overpricing, allegations on power supply over contracting, sell-back to Wesm and money scandals had hounded Ceneco in the past.

Sancho said despite their filing of voluminous complaints before the office of the Presidential Action Center, National Electrification Administration, DOE and Energy Regulatory Commission in 2016, with follow-up letter in 2017 and 2018, investigations ended limply without meaningful disciplinary actions.

They are urgently requesting, through Benitez, for a congressional inquiry on the matter of overcontracting, sell-back practices, and overpricing of power rates.