Ceneco overcharges

Did Central Negros overcharge the consumers in violation of the authority granted to it by the Energy Regulatory Commission? If so, should Ceneco reimburse the consumers for this allegedly illegal collection?

These questions were raised by Ceneco's terminated general manager Sulpicio Lagarde Jr. in a new petition sent to the ERC on October 12 and received by that office the following day. I don't know whether Ceneco has already received a copy of this new petition but several persons were also furnished a copy through registered mail dated October 13.

The possibility is that they have not because there was no news even from UCAN and I cannot expect Ceneco to blow this up in public. Just the same if they have their replies or comments, we will give them space for the sake of fair play.

Nevertheless the issues raised by Lagarde are serious since if he is proven right then Ceneco will be reimbursing the consumers P151,776,979 for collecting more than the authorized rate for the period from December 26, 2014 to July 25, 2015 alone.

This period covers only what the Lagarde petition claims because the documents available are only for these months. Since Ceneco is alleged to be still collecting the same “unapproved” rate, then this amount can go much higher until Ceneco stops the collection.

This overbilling is different from that involved with the PEDC that has been in the news lately. The Lagarde's petition only involved the billing based on the controversial contract with FDC Utilities Inc. Our readers will recall that Lagarde claimed that to facilitate the signing of this contract between the Ceneco board and FDC, he was terminated.

The termination case was resolved by the National Labor Relations Commission in favor of Lagarde. The Ceneco board has filed a petition for reconsideration and this appeal is still pending with NLRC.

The petition of Lagarde related to the claimed overbilling of consumers is therefore an extension of the conflict between Largarde and Ceneco board. Still the issue is relevant to the consumers because if his claim is true, the consumers were made to shoulder the cost of what Lagarde claims is a disadvantageous contract to consumers and beneficial to FDCUI. You can draw your own conclusions.

According to Lagarde under the contract between Ceneco and FDCUI (Section 4.5) if Ceneco takes power from FCDUI less than the contracted energy, Ceneco shall still pay the generation charge and all applicable fees, charges and costs…” Simply put if Ceneco takes less power than what it contracted to buy, Ceneco will still pay for the power it did not use. This seems to be a common provision in energy supply contracts. It is just like if you buy a plate of pizza and you cannot eat them all, you still have to pay the entire plate. This contract was entered into in December 2014.

However, the issue in this contract is not that you take it all and pay it all but rather that on February 23, 2015, the ERC approved the request of the parties for a Provisional Authority to charge Ceneco only P4.8766 per kilowatt hour. The billing was to start from December 26, 2014 until June 25, 2016.

From December 26, 2014 to June 25, 2015 out of the total 102,200,00 kWh that Ceneco contracted, the cooperative used (or sold) only 54,651,080 kWh. Thus, there remained 47,548,910 kWh that Ceneco did not use (or failed to sell) during the 7-month period. Under the contract Ceneco must pay for this unutilized or unsold power. Ceneco, of course passed on to us the cost of this unused power. We pay for the pizza we did not eat because Ceneco bought more pizza than we can swallow.

But that is not all. Not only did we pay for the power we did not use, but Ceneco charged us more than what it should.

Although ERC gave FDCUI provisional authority to charge only P4.8766 per kWh, according to Lagarde in his petition to ERC the actual billing charged by FDCUI was P7.6538 per KWh. If true then Ceneco paid P2.7772 per KWh more than what was provisionally authorized.

In fact, the petition claims that in June 2015, FDCUI charged Ceneco P10.8986 per kWh or P6.022 more that provisionally allowed.

Naturally Ceneco did not absorb the additional cost but passed it on to us. According to Lagarde he tried repeatedly to get information about these overbillings but “the information is kept secret”. Why? The amount is simply staggering.

Let's continue tomorrow.*

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