Ceneco assures refund for P238M in over-recoveries but to file MR

June 4, 2022 by No Comments

THE Central Negros Electric Cooperative (Ceneco) has assured that it will comply with the order of the Energy Regulatory Commission (ERC) to refund its consumers for about P238 million worth of over-recoveries covering the period of February 2004 to December 2017.The cooperative, though, will be filing a motion for reconsideration (MR) amid questions on the variance between ERC’s computation to that of the over-under recovery application filed by Ceneco.Its corporate planning manager, Engineer Norman Pollentes, in a press conference at Ceneco’s Annex Building in Bacolod City Thursday, June 2, 2022, said they will start implementing the refund during this month’s billing.He said the power distribution utility (DU) will have to dispense about P11 million per month within the period of two years in compliance with the order they received from the ERC last week.“Ceneco is suffering because of this order,” Pollentes said, as he lamented that “it will affect the financial viability of Ceneco as an electric cooperative.”Ceneco caters to a total of 213,950 electric consumers, the largest in the province, including those in cities of Bacolod, Bago, Talisay and Silay, and towns of Murcia and Salvador Benedicto.The ERC earlier issued a Notice of Resolution to Ceneco and to other utilities directing them to refund the total over-recoveries charged to their respective consumers.ERC Chairperson Agnes VST Devanadera, in a statement said the commission resolved to approve with modifications the respective applications of Ceneco, Pangasinan I Electric Cooperative (Panelco I) and La Union Electric Company (Lueco) for the approval of the over/under recoveries based on the formula on the various Automatic Cost Adjustments and True Up Mechanisms and corresponding confirmation process.The DUs were directed to submit a monthly report showing the effected refund until the amount shall have been fully refunded.“The commission issues the Notice of Resolution so that the concerned DUs can already reflect the necessary bill adjustment and the consumers, in turn, will immediately benefit from the refund, considering the time between the approval of the commission and the promulgation of the official decision,” Devanadera said.Over-under recovery is part of the regulatory compliance wherein all electric cooperatives are mandated for an accurate full “pass-through” charge of 100 percent cost of generation and transmission.Pollentes, however, clarified that by nature of promulgated formulation, the pass-through charges cannot be accurately passed through.Pollentes said that because of this “inaccuracy,” there is a need for a reconciliation every three years so the over-under recovery filing of compliance is devised by the ERC for all electric cooperatives to reconcile inaccuracies.Ceneco has complied with the regulatory requirements. In fact, it has four over-under recovery applications from 2004 to 2020, he said.The cooperative noted no variance in its application for 2018 to 2020 amounting to P149 million unlike those from 2004 to 2017, which was the subject of the refund order of the ERC.“For us, there’s a question on the template used by the ERC to evaluate our application. We used the same template but why is there still a variance [of about P238 million],” Pollentes said, adding that “there’s something to clarify here.”Thus, Ceneco is now asking for an exit conference with the ERC to be clarified on the latter’s computation, particularly the difference on their output.Also, it is still processing the provisions of the order, analyzing and reviewing the variance, and verifying the ERC formulation specifically on the harmonization of the Power Supply Agreement (PSA) Hourly nomination against monthly reconciliation.Pollentes pointed out that based on the application of Ceneco, the utility still has to recover a certain amount because “we have to recover the amount we subsidized for not passing through 100 percent of the generation cost.”But what happened here, he said, was ERC’s evaluation showed that Ceneco has nothing to recover. Instead, it has something to refund to its consumers.“We have a negative financial position because we have not fully recovered from the consumers the generation and transmission costs,” Pollentes said, stressing that “what we applied is for recovery but the ERC ordered us to refund.”As Ceneco expressed apprehension on the impact of the order to its financial viability, its Regulatory and Compliance Officer and Legal Counsel Atty. Leonie Vee Garanzo-Apuhin said their legal remedy is to file an MR within 15 days from receipt of the order.“We will implement [the order] but that is subject to the filing of MR before the ERC,” she said, assuring that “the motion for reconsideration will not stop the implementation of the order.”Garanzo-Apuhin also clarified that there was no overcharging on the part of Ceneco being ordered by the ERC to refund its consumers.“It’s a wrong notion,” she stressed.Moreover, the actual amount of the pass-through to be refunded to the consumers, especially on a per kilowatt hour basis, has yet to be recomputed by the cooperative.Pollentes said they are still in the process of reconciling the data as they have yet to conduct an exit conference with the ERC.He also emphasized that the refund will result in a reduction only to the portion of the electric bill.“It will not dictate the overall rate,” Pollentes said, adding that overall rate per month is dependent on many other factors like fluctuating fuel costs and volatile prices in the spot market.