FOR a local consumer group leader, the order of the Energy Regulatory Commission (ERC) for Central Negros Electric Cooperative (Ceneco) to refund the almost P238 million in "over-recoveries" to the consumers is a welcome development.
But Power Watch Negros Secretary General Wennie Sancho said the management should explain the formula and mechanisms involved in computing the refund.
"It is not enough for the Board of Directors (BODs) and top officials of the cooperative [to say] that we will be refunded, we deserve to know what are the basis of the refund covering the period from 2004 to 2017," he added.
Ceneco earlier assured that it will comply with the order of the ERC to refund its consumers for about P238 million worth of over-recoveries covering the period of February 2004 to December 2017.
The cooperative, though, will be filing a motion for reconsideration (MR) amid questions on the variance between ERC's computation to that of the over-under recovery application filed by Ceneco.
Its corporate planning manager, Engineer Norman Pollentes, earlier said they will start implementing the refund during this month’s billing.
He said the power distribution utility (DU) will have to dispense about P11 million per month within the period of two years in compliance with the order they received from the ERC recently.
"Ceneco is suffering because of this order," Pollentes said, as he lamented that "it will affect the financial viability of Ceneco as an electric cooperative."
Ceneco caters to a total of 213,950 electric consumers, the largest in the province, including those in cities of Bacolod, Bago, Talisay and Silay, and towns of Murcia and Salvador Benedicto.
Over-under recovery is part of the regulatory compliance wherein all electric cooperatives are mandated for an accurate full "pass-through" charge of 100 percent cost of generation and transmission.
Pollentes, however, clarified that by nature of promulgated formulation, the pass-through charges cannot be accurately passed through.
Pollentes said that because of this "inaccuracy," there is a need for a reconciliation every three years so the over-under recovery filing of compliance is devised by the ERC for all-electric cooperatives to reconcile inaccuracies.
Ceneco has complied with the regulatory requirements. In fact, it has four over-under recovery applications from 2004 to 2020, he said.
The cooperative noted no variance in its application for 2018 to 2020 amounting to P149 million unlike those from 2004 to 2017, which was the subject of the refund order of the ERC.
"For us, there's a question on the template used by the ERC to evaluate our application. We used the same template but why is there still a variance [of about P238 million]," Pollentes said, adding that "there's something to clarify here."
Thus, Ceneco is now asking for an exit conference with the ERC to be clarified on the latter's computation, particularly the difference in their output.
For Power Watch Negros, the amount had already been collected from the consumers which should have been held in escrow in preparation for future payment in anticipation of over-recovery.
"But the BODs and top cooperative officials were preoccupied with their perks and fat bonuses that the consumers' welfare were taken for granted," she said, adding that "be that as it may, Ceneco is now facing an insurmountable financial burden."
Meanwhile, Sancho also said that the utility's employees union had won a labor case with a collective bargaining agreement (CBA) economic package of about P200 million to be paid by Ceneco chargeable to the consumers.
Last week, Ceneco confirmed that the secretary of the Department of Labor and Employment (Dole) has already directed them to immediately implement the economic provisions of the CBA following the notice of strike previously filed by the members of its rank-and-file employees union, an official said.
Ceneco's Regulatory and Compliance Officer Atty. Leonie Vee Garanzo-Apuhin, who is also the legal counsel of the cooperative, said the decision also stated that Ceneco was not found liable for unfair labor practice.
Garanzo-Apuhin said they have already received the order from the Labor Secretary Silvestre Bello III last May 30, and that they have an available remedy which is to file a motion for reconsideration (MR) within 10 days from the receipt of the notice of order.
Aside from the economic provision of the CBA, Sancho said, Kepco-Salcon Power Corp. (KSPC) is seeking payment for its "differential billing" amounting to P280 million in December 2021, but has now ballooned to almost P500 million.
"KSPC shall collect this from Ceneco that will bleed the consumers dry," he said, adding that "we are paying for the P15 million systems loss subsidy."
The consumer group also claimed that the financial liabilities of Ceneco are now almost P1 billion.
"Can Ceneco survive? Even a beast of burden would collapse if too heavy weight would be piled upon its shoulder. What would happen to us if the financial foundation of the cooperative would collapse?" it asked.
For Power Watch, this is alarming.
Sancho said the National Electrification Administration (NEA) should conduct a financial, technical and performance audit on Ceneco to ensure that its power supply acquisitions are optimized and actually utilized and not over contracted.
"Allegations of mismanagement and corruptions will only pave the way for privatization of Ceneco," he added.