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Bacolod City, Philippines Monday, March 26, 2012
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NASECOR can’t
sue us – CENECO
BY CHRYSEE SAMILLANO

The legal counsel of Central Negros Electric Cooperative, et al, said the National Association of Electricity Consumers for Reforms, Inc. has no cause of action against CENECO, for lack of the basic requirement for capacity to sue, in the case involving a contract between the electric cooperative and Panay Energy Development Corp.

NASECOR had filed a petition with the Energy Regulatory Commission asking it to order CENECO and its officers to immediately stop purchasing power from PEDC and collecting charges from its consumers.

NASECOR, represented by its president Pete Ilagan, also asked ERC to order CENECO general manager Sulpicio Lagarde Jr. to immediately submit to the Commission, under oath, all records of CENECO on purchases of power from PEDC and the charges collected from its consumers.

It also asked the ERC to impose on the respondents the penalties provided under Section 45 of the Electric Power Industry Reform Act.

Aside from Lagarde, the other respondents are former CENECO Board president Edward Gasambelo, directors Luis Cuenca, Zenaida Lacson, Arnel Lapore, Paul Lizares, Michael Maravilla, Roberto Montelibano and former director Raul Alvarez Jr.

Pearl Montesino, legal counsel of Ceneco, said in her comment to NASECOR’s memorandum dated Feb. 28, 2012, that as a corporate entity, NASECOR has not demonstratedthat it has sustained, or will sustain, direct injury as a result of the unimplemented contract of CENECO with PEDC,

She said NASECOR also failed to present “elemental injury” that will capacitate it to institute the instant case. It was not able to establish membership to its organization of alleged consumers within CENECO’s franchise area.

As the basic requirement for capacity to sue has not been satisfactorily established by NASECOR, it has no cause of action against CENECO et all and is not thus entitled to the reliefs prayed for in its petition, she said, adding that the arguments of NASECOR in its memorandum deserve scant consideration, in the light of its lack of capacity to sue.

She said CENECO et al maintains its position that the agreement between it and PEDC was never approved or ratified by the members of the Board and this is proven by the contract itself.

Considering however the performance of PEDC vis-à-vis such unauthorized agreement, and considering that CENECO’s consumers received benefits from it, CENECO was compelled to pay PEDC the “TOU rate,” Montesino said.

Meanwhile, Ilagan, in his petition, said they have noted that CENECO and PEDC have been implementing a contract for the supply of power, and charging to the consumers the cost of electricity purchased, without the prior consent of the ERC.

If there is no prior approval from the ERC, then passing on and collection of the cost of electricity to the consumers is illegal and in violation of the EPIRA, he said.

Ilagan said ERC records will also reveal that CENECO has not complied with its obligation under the EPIRA, to obtain the Commission’s approval of the supply contract and has also not submitted the contract to ERC for approval.

Records also show that CENECO had filed an application for the approval of supply contract with KEPCO-Salcon, he said, and on February 2, 2011 it filed an application for its supply contract for commissioning power with KEPCO.

Ilagan claimed that if CENECO had not failed and refused to comply with the legal regulatory requirements, its customers would have paid only P2.3081/KWH for the testing and commissioning power from PEDC as determined by the ERC, instead of P4/KWH for the same power, which is double the amount.

As a result, he further claimed, CENECO’s customers have paid CENECO an additional, and unnecessary P77.9 million from December 2010 to March 2010 adding that it cannot be determined when CENECO began illegally collecting charges and overcharging its customers, and how much was the amount, he added.*CGS

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