CONSUMERS have complained about unusually high electricity costs. This is understandable but may be explained by unusually high electricity usage during the lockdown. My family, surely not untypical, is using electricity-consuming electronic devices for what seems like 24/7 entertainment.
Our electricity meter is positioned high up a nearby pole. My eyesight does not allow me to take readings. Nevertheless, I have no reason to doubt the meter reader’s accuracy. Hence I pay the bills, with difficulty, but without demur.
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Last Friday’s PN leading article drew attention to Bacolod’s city council’s concern about Central Negros Electric Cooperative (Ceneco)’s costs.
Councilor Simplicia Distrito, chairwoman of the city council’s committee on human resource and development observed that Ceneco’s costs are higher than those of adjacent cooperatives, specifically Northern Negros Electric Cooperative (Noneco) and Negros Occidental Electric Cooperative (Noceco). Not only are Ceneco’s costs higher but are currently increasing while those of Noneco and Noceco are decreasing.
Why?
The answer is shrouded in the mists of history.
At the turn of the millennium, electricity generating costs were centralized. All cooperatives were paying a generation charge of P3.0345 per kilowatt-hour (kWh).
In 2005, Vince Perez, energy secretary, came to Bacolod and asked, rather bossily I thought, what Ceneco is doing to source its electricity. This signified a new regime in which cooperatives, individually, signed contracts with electricity suppliers.
Ceneco’s board of directors at the time consisted of nine individuals, democratically elected by member-consumers. Each of the nine members represented an area within Ceneco’s sphere of responsibility. They acted as a conduit between consumers and Ceneco. They were not, when elected, responsible for negotiating electricity supply.
Anyhow, in 2007 Ceneco’s Board, with the assistance of the Energy Regulatory Commission (ERC) signed a contract with Cebu-based Kepco Salcon. This contract is still in force.
In 2010, Jose Rene Almendras, energy secretary, announced the opening of the Visayas branch of the Wholesale Electricity Spot Market (WESM). This is a forum where electricity producers and distributors trade. As Almendras enthused at the time, the market would be dynamic and fair market prices would be reached.
WESM opened in Cebu on 26 December 2010.
Ceneco did not seem to support WESM and instead signed a second contract with Kepco-Salcon in 2011.
This is a demonstrably bad contract and disadvantageous to Ceneco’s consumers.
Specifically it causes Ceneco to pay penalty costs if it did not purchase electricity that it was contracted to buy.
In 2013, Kepco Salcon and Ceneco jointly trooped to the ERC to force Ceneco’s consumers to pay for the electricity they did not ask for, want, or need. Understandably, ERC did not reach a decision.
In 2014, Kepco Salcon, this time unaccompanied by Ceneco, made further representations to ERC for Ceneco’s consumers to be forced to pay for the non-existent electricity. Again, ERC did nto make a decision.
In 2017, Kepco-Salcon made a further approach and the ERC, chaired by Mr Salazar, at the time on the receiving end of excoriations from the Ombudsman, awarded Kepco-Salcon P232 million to be paid by Ceneco’s consumers. We are still paying this unfair charge which appears on our bill as ERC Case 2013-141.
Ceneco consumers are saddled with the consequences of bilateral contracts whereas Noneco and Noceco have relied more advantageously on lower prices afforded as result of negotiations through the WESM market place.
This explains the huge difference in price of electricity paid by the hapless Ceneco consumer compared to the demonstrably better-managed Noceco.
We need fairness!/PN
