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Bacolod City, Philippines Monday, July 4, 2011
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‘Stop buying PEDC power,
penalize Ceneco officials’

The National Association of Electricity Consumers for Reforms Inc. has filed a petition with the Energy Regulatory Commission asking it to order Central Negros Electric Cooperative and its officers to immediately stop purchasing power from Panay Energy Development Corp. and collecting charges from its consumers.

NASECOR, represented by its president Pete Ilagan, also asked ERC to order CENECO general manager Sulpicio Lagarde Jr. to immediately submit to the Commission, under oath, all records of CENECO on purchases of power from PEDC and the charges collected from its consumers.

It also asks the ERC to impose on the respondents the penalties provided under Section 45 of the Electric Power Industry Reform Act.

Aside from Lagarde, the other respondents are former CENECO Board president Edward Gasambelo, directors Luis Cuenca, Zenaida Lacson, Arnel Lapore, Paul Lizares, Michael Maravilla, Roberto Montelibano and former director Raul Alvarez Jr.

Ilagan said they have noted that CENECO and PEDC have been implementing and continue to implement a contract for the supply of power, and charging to the consumers the cost of electricity purchased, without the prior consent of the ERC.


If there is no prior approval from the ERC, then passing on and collection of the cost of electricity to the consumers is illegal and in violation of the EPIRA, he said.

He added that they were informed of such violation of the EPIRA Law by an electricity consumer of CENECO.

Ilagan said records of ERC will reveal that CENECO has not complied with its obligation under the EPIRA, to obtain the Commission’s approval of the supply contract. Worse, CENECO has not even submitted the contract to ERC for approval, he said.

Records also showed that CENECO had filed an application for the approval of supply contract with KEPCO-Salcon, and on February 2, 2011 it filed an application for its supply contract for commissioning power with KEPCO, Ilagan said.

Commissioning power is much cheaper than power supplied during commercial operations since it should consist only of operations and maintenance costs and fuel costs, he also said.


Ilagan said that if CENECO had not failed and refused to comply with the legal regulatory requirements, its customers would have paid only P2.3081/KWH for the testing and commissioning power from PEDC as determined by the ERC, instead of P4/KWH for the same power, which is double the amount.

As a result, CENECO’s customers have paid CENECO an additional and unnecessary P77.9 million from December 2010 to March 2010, he said. Based on records, it cannot be determined when CENECO began illegally collecting charges and overcharging its customers, and how much exactly was illegally charged to its customers, he added.

Ilagan said that since the illegal collection of generation charge was perpetrated by CENECO’s officers, who purposely and intentionally failed to seek the ERC’s approval, the amounts allegedly illegally collected from the CENECO’s customers must be refunded personally by the respondent officers of CENECO.

Meanwhile, Lagarde yesterday said they have not yet received an order from the ERC asking them to explain. He said that once they receive the order from the ERC, they will have it published together with their answer.

In order not to pre-empt the ERC, Lagarde also said they will wait for the Commission to ask them to explain why the complaint should not be given due course.

Whatever they did, they did it for the interest of the consumers, he added.

He explained that because there were frequent brownouts in 2010, they had to source out power elsewhere when their contract with Green Core expired so they were able to get cheaper source of power.

Lapore, on other hand, said he had inquired from Lagarde why they allowed PEDC to supply power without approval from the ERC and he assured them during a board meeting that it is allowed under the “Time of Use” principle.

He said that if the contract will be forwarded to the ERC, he will oppose it because they were not involved in the contracting process.

Lapore said they were just surprised that the contract, which was forwarded to them during a Board meeting in March, was already signed by Lagarde with the members of the Board not shown a template or draft of it. The contract was also not ratified by the CENECO Board, he said.*CGS



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