BY ERWIN ‘AMBO’ DELILAN
THE Central Negros Electric Cooperative (Ceneco) is like having a “circus” right now.
And the “greatest show” that consumer-member-owners (CMOs) are watching is the so-called “comedy of errors”.
It all started with the pestering brownouts making Ceneco “feeble” looking for valid excuse(s) to calm the enraged CMOs.
Social media went abuzz with netizens ridiculing and cursing Ceneco executives. The business community in Bacolod was also alarmed by the frequent brownouts. Thus, a “cry” to privatize Ceneco keeps on snowballing.
In the meantime, Ceneco has to answer two major concerns raised by Power Watch Negros (PWN) and REpower Negros regarding its latest engagement with Korea Electric Power Corporation-Salcon Power Corporation (Kepco-SPC) for a 20-megawatt, 12-month extended power contract.
PWN’s Wennie Sancho spotted a price variation of P2.13 kilowatt per hour (kWh). So he asked: What is this P2.13/kWh?
REpower Negros’ Lito Coscolluela, on the other hand, asked Ceneco why it chose dirty coal over renewable energy (RE) for a measly two centavos price difference.
To clarify matters, Ceneco, on June 15, 2021, held a press conference. But instead of answering the issues (direct to the point), coop’s acting general manager and project supervisor, Atty. Dan Pondevilla, reportedly “flip-flopped” by making a litany of “tangent” explanations.
Worse, he announced the coop’s final decision of rescinding a memorandum of understanding (MOU) with the Sancho-led PWN.
Such MUO was supposedly aimed at ensuring a harmonious relationship between Ceneco and PWN to prevent mudslinging in the future. Thus, rescinding it was tantamount to a “bolshie” move of creating an enemy than winning a friend.
Pondevilla could have answered Sancho using the marketing mantra in the power industry that long-term contract causes lower rates while the short-term one produces higher rates.
On record, Ceneco and Kepco-SPC, a Cebu-based operator of a coal-fired power plant, have a previous 40-MW, 10-year power contract. But it culminated on May 30, 2021 amid recurring brownouts in Bacolod. Thus, caught off-guard, coop officials inked a new contract with Kepco-SPC, but only for 20-MW, 12-month duration. And they termed such as “contract extension” while the coop is exploring possibilities of contracting with other supplier(s) for 40-MW for the next 10 years.
Sancho said, “I am neither against Kepco-SPC nor Ceneco. I am just asking about the price difference of P2.13/kWh.”
Kepco-SPC’s previous price was only P3.29 /kWh for the 40-MW, 10-year contract. Now, it surged to P5.42/kWh in the present pact.
If computed, Sancho said, this P2.13/kWh price difference in a 20-MW will amount to P14.4 million/kWh. Then, it will result to P32M per month or P168M per year price differential to be burdened by the Ceneco CMOs later, he added.
Thus, aside from the proposed House inquiry, Sancho is also contemplating to file an administrative charge of gross negligence against Ceneco executives for exposing consumers to a higher price, which is a violation of the Electric Power Industry Reform Act of 2001 (EPIRA ) Law.
“They didn’t advance the welfare of the consumers whom they are sworn to serve,” he emphasized.
As to Coscolluela’s concern, Pondevilla said, “If the Department of Energy (DOE) says the Ceneco Board has the power to evaluate and choose directly between the offer of Kepco-SPC and Energy Development Corporation (EDC), we will try to negotiate to shorten the extended contract possibly for six months and opt for the latter’s bid.”
If not, we will consume the one year and enter a new contract in 2022 with RE power source good for 10 years, Pondevilla added. Up for grab is EDC’s geothermal (geo) power.
EDC, per record, has a current combined generating capacity of 722.5-MW courtesy of its Negros and Unified Leyte geo camps.
However, Section 5 of the DOE’s Competitive Selection Process (CSP) Circular says that all distribution utilities (DUs) in the country are mandated to establish TPBAC.
TPBAC then has the sole authority to choose the qualified bidder, and neither the general manager nor any member of the board.
As to the TPBAC composition, there should be four representatives coming from the captive customers such as:
1. A lawyer of good standing
2. A finance officer with knowledge in electricity pricing
3. Someone with technical expertise on DU operations
4. Someone with background on local and international competitive biddings
Thus, seeking anew DOE’s opinion on whether the board has the power to evaluate and choose certain power contractor is a “futile exercise”.
And the move to negotiate to shorten the duration of the newly-inked power pact with Kepco-SPC will invite a legal battle.
Isn’t it tricky?
Kepco-SPC is not an ordinary power company. It’s a multi-million power firm with battery of lawyers. And for possible “breach of contract”, the firm is capable of hauling anyone (from Ceneco) to court for an intense litigation.
Likewise, Sancho warned that the new Ceneco-Kepco-SPC deal can only be rectified to shorten the term or totally be rescinded if it’s found to be grossly disadvantageous to the consumers.
But Section 45 of the EPIRA law states that only the Energy Regulatory Commission (ERC) has the mandated task to evaluate or investigate the possible violation(s) in any power deal.
And Section 8 of the same law provides the specific grounds/ procedures for the revocation or amendment of a certain power contract.
But granting that the current contract price of P5.42/kWh is grossly disadvantageous to the Ceneco CMOs, the questions are:
1. Who are the TPBAC members of Ceneco, who recommended / approved the 20-MW, 12-month extended power deal with Kepco-SPC?
2. And what necessitated them to do so?
These two questions then ushered the birth of a Task Force Ceneco (TFC), the first time in history.
This, as TFC wants to ensure that Ceneco TPBAC’s composition (really) adhered with what is required under DOE’s CSP Circular, and if the bidding procedures set thereby were truly observed or followed.
In sum, what’s happening now in Ceneco is like a trial-and-error “fantasy”.
Sancho’s and Coscolluela’s concerns were just simple that require simple answers, too.
“Beating around the bush”, however, led Ceneco to a rib-tickling yet convoluted situation./PN
