KEPCO SPC (Kepco) which supplies electricity to the Central Negros Electric Cooperative (Ceneco) has filed a motion before the Energy Regulatory Commission (ERC) to be granted permission to collect P232 million from Ceneco’s consumers in “unnominated contract quantities.”
For those of us who are not fluent in bureaucratese “unnominated contract quantities” means that Kepco would like us to pay for electricity that we did not want or need and did not use. Kepco asserts that Ceneco has signed a contract and is insisting that the P232 million alleged indebtedness is compatible with the contract.
Wait a minute!
We have been here before.
Kepco’s case with the ERC is entitled “Second urgent motion to resolve and allow Kepco to collect the unnominated contract quantity with a prayer that this will be passed on to the consumers.” As I recall the “First urgent motion” was filed last year. I also recall that the amount involved then was P189 million and covering the period July 2011 when the contract was signed until February 2013. The second urgent motion covers the period July 2011 until November 2013.
Does this mean that we have a chronic problem and that the increase from P189 million to P232 million covers the period from March 2013 until November 2013? Will the problem never end? Will Ceneco’s consumers be expected to pay for missed electricity until the contract expires in 2021?
The “First urgent motion” was filed jointly by Kepco and Ceneco. Now Kepco is on its own. Does this mean the Ceneco is no longer supportive of Kepco’s desire to obtain millions from Ceneco’s hapless consumers who, after all, did nothing to engender this ludicrous situation.
Kepco is facing opposition in the form of a motion submitted to the ERC by the Diocese of Bacolod Social Action Center and Bacolod Sangguniang Panlungsod seeking dismissal of Kepco’s claim.
There was a hearing last Friday chaired by ERC’s Rhett Mislang who said that the motion to dismiss pertains to the authority of the representative of Ceneco to act on KSPC’s application. Mislang said that the ERC will ask Kepco to explain what happens to the unnominated contracted quantity and whether this was used by Kepco since it was not used by Ceneco.
This is promising. Is it possible that ERC may eventually ask whether Kepco suffered financially from Ceneco not taking delivery of contracted electricity? In other words, ERC may put Kepco in the position of having to prove losses accruing from Ceneco not adhering to the second contract it signed with Kepco in 2011. If there are no losses, then why should we pay P232 million?
I hope this possible pragmatism prevails. This may result in the current claim of P232 million being reduced substantially and perhaps eliminated altogether.
ERC may glean that Kepco sells some electricity on the Visayan Wholesale Electricity Spot Market (WESM). It would help to understand the overall picture if we knew WESM prices.
Ceneco is in a mess with its bilateral contracts.
It has two contracts with Kepco, one signed in 2007 for 40 megawatts (MW) and the second signed in 2011 for 24 MW. It has an agreement to purchase 20 MW from Green Core Geothermal Inc. Unfortunately, Green Core has had problems in supplying electricity.
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Other bilateral agreements signed by Ceneco since 2011 include 18.9 MW of extraordinarily highly priced electricity from Energreen Power Development and Management Inc. Fortunately, Energreen is not yet able to supply any electricity to Ceneco. There have been endless missed “deadlines,” the last one being on September 26.
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The Utilities Consumers Alliance of Negros (UCAN) reports that the National Electrification Administration has granted provisional authority requested by Ceneco to allow it to charge its consumers for electricity from Energreen which does not yet exist. Who is Ceneco beholden to? Is it the unfortunate consumers or is it the companies with which Ceneco signs disadvantageous bilateral agreements? Ceneco’s loyalty seems to reside with its suppliers and not with its consumers.
Ceneco has also signed a 20-MW agreement with Filinvest Development Corporation Utilities Inc. Former Ceneco general manager Sulpicio Lagarde Jr. reportedly stated that it was this agreement that caused a rift between himself and Ceneco president Arnel Lapore. (Lapore signed but Lagarde apparently did not).
It ain’t over.
Ceneco is making an application to the ERC for yet another bilateral agreement. This time the lucky partner is Palm Concepcion Power Corporation.
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ERC is under new management. Jose Vicente B. Salazar is the incoming Chairman. I believe he is also billed as Chief Operating Officer (COO). This, too, is promising. It suggests that ERC may adopt a more “hands-on” approach than before.
Consumers need ERC to instruct and direct Ceneco more actively than in the past. ERC needs to analyze WESM prices which paid in Ceneco’s bilateral agreements. Ceneco hardly uses WESM at all. This is costing us billions since WESM prices are lower than the agreed prices in Ceneco’s bilateral contracts.
It is time to call a halt.