CENECO explanation on P10.74/KwH ‘another exemption to an exemption’

Former Councilor Wilson Gamboa, Jr., in a Bacolod Sangguniang Panlungsod (SP) Committee on Energy public hearing chaired by Councilor Kalaw Puentevella held last September 9, 2022, blurted out at the “emergency” justification of the Central Negros Electric Cooperative, Inc. (CENECO) as to why they contracted the P10.74/KwH generation cost from Palm Concepcion Power Corp. (PCPC), as “another exemption to an exemption”.

CENECO entered into a negotiated Power Supply Agreement (PSA) with PCPC under a cover of the so-called “emergency” which Gamboa aired disagreement through a face-off question to a member of CENECO Board of Director (CENECO-BOD) Fr. Ernie Larida in attendance, saying, “the common understanding of emergency is when there is a sudden increase in demand of electricity or power.”

Larida argued that the emergency occurred because there was no available power supply but eventually indicated when pressed to answer, that “there was an emergency” because of the defaulted 44-Megawatt non-payment of CENECO for the price differential accrued from the two illegally extended PSAs with the Kepco-Salcon Power Corp. (KSP) and not that there was no available power supply therefore “an emergency situation occurred”.

Gamboa, on the other hand stressed, “It was actually because of the illegal actions taken by the CENECO-BOD that we experienced high power rates, power shortages and outages resulting into an ‘emergency’ as confirmed by Director Larida.”
He likewise explained that his impulsive utterances stemmed from the latest Energy Regulatory Commission (ERC) Tariff or Rate at P4.59/KwH as the supposedly basis of the CENECO actual rate to be charged “under an emergency situation” to members-consumers-owners, but as cited anew by CENECO Corporate Planning Head Norman Pollentes, that because of “certain circulars” he called “acceleration and escalation”, more charges were imposed that added up to P10.74/Kwh generation rate from said ERC Tariff of P4.59/KwH.

Gamboa retorted, “These new citations floated by Eng’r. Pollentes are a total violation of the Supreme Court Ruling Alyansa ng Bagong Pilipinas, Inc. versus the ERC, et. al which I have been citing again and again and the Department of Energy (DOE) Department Circular 002018-02-0003 adopting and prescribing the Policy for the Competitive Selection Process (CSP) in the procurement by the Distribution Utilities (DUs) of Power Supply Agreement (PSA).”

Relevant portions of said DOE Circular 002018-02-00003 Section 2.2 was requested by Gamboa to be read aloud by Director Fr. Larida and he read, “All PSAs shall be procured through the CSP; Provided however, that the following instances shall warrant a certificate of exemptions from the DOE on the conduct of CSP.”

Larida also read Section 2.2.2 stating in part that the cooperation period of the negotiated procurement of Emergency Power Supply shall not exceed one year, provided further, that “the rate shall not be higher than the latest ERC approved generation tariff for same or similar technology in the area” – as the basis of the “emergency PSA” with PCPC.

When asked further by Gamboa what is the latest ERC approved Generation Tariff for same generation in the area, Larida now refused to answer and referred the question to Pollentes, refusing to directly and personally answer the question despite that it was he who cited the provision, on whether he understood it or not.

Gamboa in the end simply requested CENECO to provide this particular “ERC circular” together with the Notice of Exemption as presented, a reiteration of his request in the last August 18, 2022 public hearing that all documents be submitted to the SP.
He added, “Should we the CENECO members-consumers-owners bear the incompetence, mismanagement and dishonesty of the CENECO-BOD, which is actually the ‘original sin’ and that all their actions are “falsus in uno, falsus in omnibus”, “false in one thing, false in everything” or “illegal in one thing, illegal in everything”?*