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BY NEIL HONEYMAN
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Tuesday, October 17, 2017
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IN MAY, Executive Secretary Salvador Medialdea issued a 90-day preventive suspension to Energy Regulatory Commission (ERC) chair Jose Vicente Salazar on the grounds of “serious dishonesty, gross neglect of duty, grave misconduct, gross insubordination, violations of the Government Procurement Act and violation of the Ethical Standards for Public Officials and Employees.”
Not the kind of person we want to have authority over our personal finances.
Yet, during his suspension period, on June 27, he authorized the Central Negros Electric Cooperative (Ceneco) to collect P232,010,090 from its hapless consumers.
I am pleased that Ceneco president Roy Cordova and his Board are reviewing the implementation of the ERC order signed by Salazar. The Board should be aware that it is being asked to extract P232 million from the consumers for electricity they did not want, did not need, did not ask for, and did not receive.
I am also pleased that Rep Greg Gasataya wants the House of Representatives to look into the ERC order. Perhaps our elected representatives will recognize the unfairness of what the ERC proposes.
Why did Ceneco sign, in 2011, a contract with Kepco-Salcon for electricity well beyond what its consumers required? Why did Ceneco sign a contract which would result in penalty costs for not consuming this unwanted electricity? Why did the ERC approve this contract which is demonstrably disadvantageous to the consumer?
This is a long-standing issue.
In 2014, Ceneco and Kepco-Salcon made a joint petition to the ERC to retrieve P189.2 million for the unconsumed portion of the electricity specified in the 2011 contract. The ERC did not make a decision on the matter.
In 2015, Kepco-Salcon, without Ceneco this time, made another petition to the ERC. Again the ERC did not make a decision.
Clearly the ERC was in a quandary. Would it be unfair for the ERC to request Kepco-Salcon to prove that it had incurred losses as a result of its 2011 contract with Ceneco?
Meanwhile, Ceneco’s Board of Directors had become infatuated with bilateral contracts and formed alliances “with the provisional authority of the ERC” with several suppliers.
These bilateral contracts are expensive and unnecessary. It is generally cheaper for an electric cooperative to buy its electricity from the Wholesale Electricity Spot Market (WESM) whose Visayan operation was opened by Energy Secretary Jose Rene Almendras on Dec. 26, 2010.
In any case, why should the consumer be responsible for bad decisions made by Ceneco’s Board of Directors?
A few years ago, General Manager Sulpicio Lagarde Jr. was fired as a result of a Board decision. The National Labor Relations Council (NLRC) found in favor of Lagarde and instructed the Board to make payments to Lagarde. The consumer did not suffer from the bad Board decision. Why should the consumer suffer from the bad board decision involving Kepco-Salcon?
In any case, the illicit presence of ERC’s Salazar at the June 27 meeting should be enough to nullify the decision made to fine Ceneco’s consumers.
President Duterte fired Salazar last week. He can cause Ceneco not to penalize its consumers./PN
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