BACOLOD City – The National Electrification Administration (NEA) has conditionally granted its consent to the joint venture agreement (JVA) between Central Negros Electric Cooperative (Ceneco) and Negros Electric and Power Corp. (NEPC), but subject to the fulfillment of conditions.
This is based on a memorandum dated Nov. 13, 2023 signed by NEA administrator Antonio Mariano Almeda.
The conditions include the settlement by Ceneco of all of its outstanding loans and obligations with NEA, and with other creditors who hold liens on its properties and the removal of such liens.
Another condition is the payment by Ceneco of the pertinent separation pay and retirement benefits under applicable laws and collective bargaining agreements that will be due to its employees who will be separated by virtue of the implementation of the JVA.
Also, Ceneco must ensure that it has set aside adequate funds for the bill and meter deposits of its member-consumer-owners (MCOs).
In accordance with Rule III, Section 18 (b) of Department of Energy’s (DOE) Department Circular 2013-07-0015, the assets of Ceneco that were funded or sourced from grants, subsidies or other assistance from NEA shall not form part of the assets that shall be sold to NEPC .
Almeda directed Ceneco to identify such assets and submit their current valuation as appraised by a NEA- accredited appraisal service provider.
Upon receipt of the valuation, NEA shall then endorse the matter to the Office of the Solicitor General or Department of Justice for appropriate action, the NEA administrator further said.
He added that after the receipt by Ceneco of its appropriate shares in NEPC, Ceneco must submit to the NEA its nominated representatives to the Board of NEPC, Almeda further said.
Another condition is the grant of a valid and effective legislative franchise to NEPC for the current franchise area of Ceneco.
Also, NEPC must undertake that it shall fulfill the mandate for the full electrification of the franchise area of Ceneco which shall be funded by NEPC.
The NEA reserves its right to recommend that this express stipulation be included in the franchise of NEPC.
Almeda said Ceneco must submit a full accounting of the settlement of its obligations and the net cash amount it shall have after the implementation of the JVA, including all of its outstanding loans and obligations with NEA and all other creditors, as well as the value of the assets funded or sourced from grants, subsidies or other assistance from NEA.
Ceneco is directed to preserve such net cash and shall only utilize the same with the approval of the NEA, the NEA administrator further said.
He also said should any of the foregoing conditions not be met, NEA’s consent to the JVA shall be reconsidered.
Almeda further directed Ceneco to ensure the provision of services to its MCOs up to the full implementation of the JVA and the start of operations of NEPC.
There should be no disruption in services during the transition of operations, he also said.
To recall, the Ceneco through a letter dated Feb. 16, 2023, queried the NEA on a proposal for a JVA it received from Ignite Power and Energy Holdings which was later substituted by Primelectric Holdings Inc./NEPC.
NEA, in its reply letter dated April 14, 2023, advised Ceneco that the JVA was in essence a sale of assets of the cooperative and thus it should comply with Section 36 (b) of Presidential Decree No. 269 (PD 260), known as the National Electrification Administration Decree.
The JVA was signed by Ceneco and NEPC on June of this year./PN
