Cane Points: Putting Things in Perspective

Consumer advocates filed a motion for reconsideration on the ERC decision authorizing Ceneco to collect P0.0817 / kwh for 50 months, or until the amount is fully paid, from its consumers to pay the P232 million differential billing which Ceneco owes to Kepco.

The amount of P232 million is being used as the monster to manipulate emotions and scare consumers to mindlessly oppose the ERC decision without taking the time and effort to study the whole issue.

It is best to put things in their proper perspective before reacting to any issue.

Ceneco’s average monthly energy sales for 2016 is 56.8 million kwh. For 2017, it is safe to assume that it is already more than 57 million kwh. At an average rate of P10 per kwh for residential consumers, this amounts to a monthly collectible by Ceneco form its consumers of P570 million.

Ceneco collects roughly P570 million per month from its consumers. In one year, this amounts to P6.84 billion.

At first glance, P232 million is such a huge amount. But it is not even half of Ceneco’s monthly collectible of P570 million. It is a small fraction compared to the electric coop’s annual energy sales of P6.84 billion.

Moreover, this P232 million will be collected for 50 months, or until such time that the full amount is fully paid.

Computed at P0.0817 / kwh multiplied by Ceneco’s average monthly energy sales of about 57 million kwh, this translates to P4.66 million per month. At that monthly rate, the P232 million can be paid in 50 months. If the annual load growth of Ceneco is taken into consideration, the amount can definitely be paid in less than 50 months.

Some sectors also prey on consumers’ ignorance by threatening them that the collection of the P0.0817 / kwh will continue until 2021, which marks the end of the power sales contract between Ceneco and Kepco.

They imply that Ceneco might collect more than just P232 million from its consumers until 2021, once the collection of the P0.0817 / kwh is implemented.

Nothing is farther than the truth.

The ERC decision is specific as to the period covered by the differential billing of P232 million, which is July 2011 to November 2013.

The ERC decision is also very specific the amount Ceneco should collect, which is P0.0817 / kwh for a definite period not more than 50 months, or even less than 50 months, if Ceneco’s annual load growth is taken into consideration.

How did ERC arrive at the amount of P0.0817 / kwh?

After ERC held numerous hearings right here in Bacolod to allow all parties (Ceneco and Kepco on one side and the intervenors and oppositors on the other side) to present evidences and witnesses to support their stand on the collection of this P232 differential billing, ERC issued its decision.

ERC held that the power sales contract for the delivery of the 24 MW load between Ceneco and Kepco is valid and fair to all parties concerned.

ERC recognized that Ceneco owes Kepco P232 million representing the differential billing for the period July 2011 to November 2013.

ERC examined the computation for the P232 million for the covered period and established that the computation is correct and is based on ERC’s previously duly-approved formula which is applicable to that contract.

Thus, ERC authorized Ceneco to collect P0.0817 / kwh for 50 months, or until the amount is fully paid, from its consumers to pay the P232 million differential billing which Ceneco owes to Kepco.

When ERC issued the decision, the period in the contract between Ceneco and Kepco was roughly 50 months. ERC divided the P232 million by 50 months, which was roughly the remaining period on the power sales contract, which resulted to a monthly payment of P4.64 million.

Then ERC divided the P4.64 million by the 56.8 million kwh, which is the monthly energy sales of Ceneco for 2016, to reach the amount of P0.0817 per kwh. No more no less.

The amount was not reached arbitrarily but had to under the closest scrutiny and evaluation.

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