AN INDEPENDENT VIEW

BY NEIL HONEYMAN

Tuesday, November 14, 2017

IN OCTOBER, the Central Negros Electric Cooperative (Ceneco) voted to suspend the implementation of the Energy Regulatory Commission (ERC) order which instructed Ceneco to charge its consumers an extra P0.0817 per kilowatt-hour for the next 50 months. This is to pay its supplier, Kepco-Salcon P232 million for electricity that Ceneco contracted to buy but did not use.

The worm turns.

As far as I know, this is the first time that Ceneco has not complied with an ERC order. What will Kepco-Salcon do?

What next?

In 2016, when Energy Secretary Alfonso Cusi was installed, he mentioned that his aim is to reduce electricity prices. He can achieve this laudable aim.

How?

I seriously wonder whether the ERC should exist at all since it allows bilateral contracts between Ceneco and suppliers which are demonstrably not in the interest of Ceneco’s consumers.

Secretary Cusi can reduce Ceneco’s electricity costs by rescinding those bilateral contracts wherein the electricity costs are regularly higher than the price of electricity obtainable from the Wholesale Electricity Spot Market.

The situation with Panay Electric Company (PECO) is even worse in that the price paid by the hapless denizens of Iloilo is even higher than that paid by their counterparts in Bacolod. The sweetheart deal between PECO and its supplier needs to be examined and changes implemented to reduce the manifest profiteering that has existed for many years.

I agree with the principle that public meetings relating to energy supply should be held locally. This was established in Bacolod several years ago when Partylist Bayan Muna Representative Neri Colmenares lobbied that this should be done. These public meeting enable local consumers to air their concerns.

Colmenares’ Bayan Muna’s successor, Carlos Zarate, is also the consumers’ friend. If he is successful, consumers will soon no longer have to pay Value Added Tax (VAT) on systems losses. Since VAT is meant to be a tax on consumption and the systems loss, by definition, is electricity that we do not consume, then it is logical to assert that VAT on systems losses should have been applied in the first place.

I notice that ERC is guilty of using expressions that we cannot understand. On June 20, ERC directed Ceneco to collect P853 million over 60 months for the “automatic cost mechanism true-up adjustment.”

Say what? Please explain, with supporting information, so that we can comprehend.

Fortunately, on October 19, the ERC issued another order deferring the previous one.

Does anyone in ERC know what is going on? (jbabueg@yahoo.co.uk)/PN