BY ERWIN ‘AMBO’ DELILAN
THE CONTROVERSIAL Central Negros Electric Cooperative (Ceneco) is in “silent chaos”.
The cause is the much-talked 20-megawatt (MW), 12-month extension power deal with Kepco-Salcon Power Corporation (KSPC).
Whether they like or not, the coop’s executives have no choice but prepare for a tedious “legal circus” after they were charged before the National Electrification Administration (NEA) by Power Watch Negros’ (PWN) convenor Wennie Sancho with numerous administrative complaints such as:
* grave misconduct
* gross neglect
* dishonesty
* gross insubordination
* conduct prejudicial to the interest of consumers, and
* willful violation and non-compliance to the NEA issuance, memoranda and other rules and regulations are normal
Also joining the fray is Sanlakas-Negros, which is also mulling another set of administrative charges but this time against the members of coop’s Third Party Bids and Awards Committee (TPBAC).
Ceneco officials must also prepare their “pockets” once this extended power pact is nullified by the Department of Energy (DOE) due to the absence of the completion of the Competitive Selection Process (CSP).
If this happens, they’re bound to refund a projected amount of more than P900 million unless they’re “brave” enough to halt the deal with Kepco (right now) pending their CSP completion.
But if no one dares, KSPC’s billing clock will continue to tick with P5.42/kWh (kilowatt per hour) charge rate until June next year.
In simple arithmetic, 20MW is equivalent to 14,600,000 kWh, and multiplied with P5.42 this will be equal to P79,132,000 per month, and if multiplied with 12 months will be equal to P949,584,000. Quite huge!
Imagine such amount to be refunded by the coop execs just in case. In our native tongue, “sakit sa bulsa!”
But this is it once the DOE rules with finality that the controversial Ceneco-KSPC’s 20-MW, 12-month extension deal is null and void.
And sad to say, the price of the contract (if invalidated by DOE), of course, cannot be passed on to consumers.
So those who inked the pact shall be held responsible to refund whatever amount KSPC will charge later.
I am neither a tarot card reader nor a psychic but I can sense the legal implication(s) of the recent opinion of the Department of Energy (DOE) through its Electric Power Industry Management Bureau (EPIMB) in this particular case.
EPIM officer-in-charge Mario Marasigan, in his response to the letter-complaint by Rodolfo Song, secretary of Ceneco Member-Consumer-Owner Federation (CMCOF), simply asked the coop’s Board of Directors to conclude (now) the CSP for the coop’s 20-MW power requirement.
Marasigan then punctuated that the Ceneco Board cannot invoke the extension provision of the Power Supply Agreement (PSA) with KSPC to renew the same for another period of one year.
In short, the very keyword here is simply the CSP.
Ceneco execs then must revisit their approved Term of Reference (TOR) as to coop’s power requirement and in choosing power supplier(s). TOR will be Ceneco’s “bible” in conducting CSP. And with it, they will never go wrong.
But sans completion of CSP in any PSA will put any distribution utility (DU) like Ceneco, in “deep” trouble.
The High Tribunal already warned about this through its jurisprudence in the case of Alyansa Para sa Bagong Pilipinas, Inc. v. ERC, et al.
Such (jurisprudence) led Manila Electric Company (MERALCO) to suspend scores of its PSAs with different power generation companies (GenCos) after former Supreme Court (SC) Senior Associate Justice Antonio Carpio, in his Ponencia, clearly told DUs, like MERALCO, “not to escape CSP and enter into-self negotiated deal(s) instead. “
Carpio likewise emphasized that, in this case, the Energy Regulatory Commission (ERC) committed grave abuse of discretion amounting to lack or excess of jurisdiction when it unilaterally postponed the effectivity of the CSP by issuing ERC Resolution Nos. 1 and 13.
This, as Carpio stressed that, in the case of MERALCO, “The ERC’s delegated authority is limited to implementing or executing CSP in accordance with the 2015 DOE Circular, not postponing CSP so as to freeze CSP for 20 years, effectively suspending CSP for one entire generation of Filipinos.”
Moreover, Ceneco execs should also take note that the SC en banc, voting 10-2-1, also ruled that “all deals or PSAs submitted by DUs or the power companies to the ERC on or after June 30, 2015, must undergo CSP.”
Thus, Bacolod Councilor Wilson Gamboa , Jr. was legally and technically right in proposing an ordinance on June 1, 2021,urging Ceneco to consider implementing the CSP for its power deal with KSPC.
CSP is hereby mandated (for DUs to comply) under the Department Circular 2018-02-0003of the DOE.
Being a practicing lawyer, Ceneco’s Acting General Manager and Project Supervisor Dan Pondevilla, must have an ample knowledge or legal background about this. Had he guided the Board before, the current “mess” could have had been avoided.
As to the previous statement of Ceneco president Jojit Yap that they opted to push through with the extended contract with KSPC because it was already expired, pending decision of the DOE, such is quite “upsetting “.
Also saying that that they can’t rely on the Wholesale Electricity Spot Market (WESM) as the cost of power goes up and down was another “vague” contention. Because buying power from WESM for emergency cases is legally safer than inking any contract with any power generator sans CSP.
WESM, for the information of Yap, is one of the cornerstone market devices established by the government under the Philippine 2001 Electric Power Industry Reform Act (EPIRA). And its establishment was really aimed at facilitating the competitive scheduling and dispatching of power plants in an optimal and transparent manner.
Likewise, WESM is (always) legally expected to:
1. Provide a mechanism for setting the price of energy quantities not covered by bilateral power supply contracts and of variations.
2. Enable power generators to sell power and, at the same time, allow suppliers and wholesale consumers to purchase electricity, even if there is no bilateral contract between the two.
3. Establish a merit order dispatch system for generation whether or not they have bilateral contracts.
So Yap should always ponder with this phrase: Ignorance of the law excuses no one.
Likewise, being the incumbent coop president, she should study more about the dos and don’ts on power industry dealings. Things there are “tricky” really.
And whether she likes it or not, Yap must embrace now the “complexity of life” in the power industry. To be members of Ceneco Board is not just all about glitz and glamour. It’s all about great and insuperable responsibility rather.
But what is “alarming” amid this “silent chaos” in Ceneco though is when an Italian novelist, journalist and essayist’s projection will come true that, “Heads will fly all over the place, others will explode by themselves, everyone will have their chance to betray, and those who don’t betray will be betrayed.”/PN
