The only way to stop losing ₱40-m/month

By Herbert Vego

TIME was when we heard employees of Central Negros Electric Cooperative (Ceneco) deploring the operational losses of the distribution utility to the tune of ₱20 million a month. Right?

We fear it’s no longer right.

“Ceneco is now losing ₱40 million per month,” said our friend Jonathan Cabrera in an interview with this writer on the program “Tribuna sang Banwa” on Aksyon Radyo-Iloilo last Sunday. He was reporting from Bacolod City, covering the first two days (June 24 and 25) of the six-day plebiscite pushing for the approval of a joint venture agreement (JVA) between Ceneco and PrimeElectric Holdings (no longer Ignite Power as previously identified).

Once approved in that plebiscite, the joint venture would operate in the name of Negros Electric and Power Corporation (NEPC).

“I learned that 40 percent of the cooperative’s income goes to salaries and bonuses,” Cabrera added.

Ceneco’s losing streak must have alarmed its 210,000 member consumers in the cities of Bacolod, Bago, Talisay  and Silay, and the towns of Murcia and Don Salvador Benedicto. Exactly 192,188 of them are eligible voters. How could their co-op stay alive amid its impending bankruptcy?

Fortunately, revealed Cabrera — a broadcaster who is also a PR executive of MORE Power in Iloilo City — there was already an indication that the JVA would push through.

“By the end of the first day of the plebiscite,” he enthused, “around 10 percent of the eligible participants had cast their votes – 13,587 in favor of the JVA, and 3,740 on the contrary.”

It’s a cinch there is now a trend that could be more remarkable in four more plebiscite days set by the National Electrification Administration (NEA) — July 1,2, 8 and 9.

Why the positive trend?

“Ceneco’s franchise will expire in 2030,” Cabrera revealed. “No less than its retiring employees fear that it would not be in position to pay them their retirement benefits because it has no more capex [capital expenditure] to lean on.”

The Energy Regulatory Commission (ERC) has disapproved its application for infusion of new capex.

As far as the member consumers are concerned, they worry over verifiable media reports on the insolvency of Ceneco. It is buried deep in debt due to the system’s losses and unnecessary expenses. It is dependent on loans – now around ₱800 million — from banks and other lending institutions.

“Ceneco’s problem has come to the attention of Sir Roel Castro,” Cabrera replied to my question on how the unsolicited JVA proposal had surfaced, referring to the president and CEO of MORE Power.

The last time I was in Bacolod, I shuddered on seeing leaning and rotting electric poles that could not be replaced due to unavailability of material reserves.

“Panay ang brownout dito,” a friend lamented.

No wonder the incumbent political stalwarts of the local government units are unanimous in campaigning for the pending joint venture.

“The JVA will ensure better services and lower electricity rates,” Bacolod City Mayor Albee Benitez said in a radio interview.

Benitez must have reviewed the track record of MORE Power in the last three years since it replaced Panay Electric Co. (PECO) as Iloilo City’s distribution utility in 2020.  In such a short period, its customers have grown from 63,000 to 93,000.

MORE Power, which is a sister company of PrimeElectric, had brought down the utility’s system’s loss from 30 percent to 6.5 percent within three years.

Incidentally, MORE Power now charges ₱11.65 per kilowatt-hour, or more than a peso lower than Ceneco’s ₱12.78. This debunks the objectors’ claim that the JVA would result in higher rates.

If the simple majority of the 192,188 eligible plebiscite voters say “yes,” it would give birth to the Negros Electric and Power Corp. (NEPC).

It means that PrimeElectric will pay Ceneco 100 percent of its distribution assets, of which 70 percent will be in cash and 30 percent in shares in the new distribution company that will be put up through a congressional franchise.

The JVA would not edge out Ceneco employees who will enjoy the option to re-apply and pass.

Sorry na lang sa mga korap.