Business: CENECO Incurs P40M Line Rental last February, Blames NGCP-WESM

Central Negros Electric Cooperative, Inc. (CENECO) blamed the Wholesale Electricity Spot Market (WESM) yesterday for not fully informing them of the P40

million “pass on” price implication of the “congested” Kabankalan-Bacolod lines 1 and 2 to consumers last February 16 to 23, thus forcing them to pay additional P1.46 to P2.00 last March.
It was discovered that “the congestion was caused by a Two Million Peso protection equipment failure of the National Grid Corporation of the Philippines (NGCP) that took eight days to restore.”

Records shown by Ceneco’s Corporate Planning Office (Corp Plan) read, “Such event cost CENECO an additional of roughly P0.80 per kwh increase in line rental paid to WESM translated to P40 million pass on cost to consumers.”

Ceneco Corp Plan reports further read, “Said congestion was triggered by NGCP and was beyond the control of Ceneco and Ceneco was not even aware of this.”

Applying the “Cause Causation Principle,” NGCP must carry the price burden of such eventuality since it caused said congestion that triggered a triple Line Rental increase.
Earlier this month, Ceneco Corp Plan reported, “For the month of February 2012 alone, WESM already slapped an additional P1.52 per kwh for Line Rental which is a triple cost compared to P.50 average charge same time last 2011, thus the rate increases now suffered by Ceneco consumers are by law, ridiculous, exorbitant, and unjustified.”

Meanwhile, former Ceneco President Edward Gasambelo in media and social media outlets claimed otherwise.

He argued in a statement and television show Dot Com, “It is not all line rentals. Ceneco lacked ‘contingency supply’ which was only available in Panay. WESM bought power from Panay Energy Development Corp. (PEDC) at spot market prices which were very high during that trading period. Ceneco put all power supply in the south Cebu and Leyte. When NGCP maintained (repaired) their 138 KV lines (Kabankalan to Bacolod lines) last February 16 to 23, WESM by their legal mandate thru the system operator has no recourse but buy power from the only available plant, PEDC.”

Gasambelo’s statement further read, “This is the first documented indiscretion if not anomaly on Power Supply Contracting. The consumers are not supposed to be burdened by this mistake and therefore deserved to be refunded by Ceneco alone. Had they observed the best practices rule, these incidents could not have happened.”

He warned consumers, “Watch out, another series of line rental increase could happen whenever there are problems in the Kabankalan - Bacolod NGCP 138 KV lines.”*