MANILA -- Power distribution firm Zamboanga City Electric Cooperative (ZAMCELCO) has filed a petition before the Energy Regulatory Commission (ERC) seeking a refund of allegedly overbilled costs amounting to around PHP 441 million for the purchase of electricity supply from the Western Mindanao Power Corporation (WMPC).
The electric cooperative likewise sought the withdrawal of the application for approval by the ERC of its power sales agreement (PSA) with the WMPC.
In its motion filed before the ERC last April 6, ZAMCELCO claimed that its PSA with the WMPC is not yet in effect as this needs final approval from the ERC and the electric cooperative has yet to secure an A rating from the National Electrification Administration (NEA) resulting from the awarding of the investment management contract to a private utility.
Currently, ZAMCELCO has obtained a ‘C’ rating based on the latest NEA Electric Cooperative Overall Performance Assessment.
“ZAMCELCO has filed a motion before the ERC seeking for the withdrawal from the PSA as well as the withdrawal of the application for its approval because the WMPC is cutting off the power supply,” ZAMCELCO legal counsel Atty. Joshua Paraiso said in a press briefing held Tuesday in Makati City.
ZAMCELCO signed a Power Sales Agreement with the WMPC on May 27, 2015 for the purchase of electric power to be distributed at its franchise area in Zamboanga City.
The joint venture of Crown Investments Holdings Inc. and Desco Inc., which took over the management of the electric cooperative in January, has discovered through its financial audit that ZAMCELCO had overpaid WMPC in the amount of PHP 441 million since 2015.
The power supplier charged ZAMCELCO for a fixed capacity of 50 megawatts when it would not use over 25 megawatts every month. The “contracted capacity” must not be billed as the PSA is not yet in effect.
“WMPC had no basis to charge a capital recovery fee and fixed operations and maintenance fee based on a monthly “contracted capacity” of 50 MW. WMPC should have computed the said fees based only on the actual nominated/utilized capacity,” the motion read.
“It bears emphasis that for the past three years, ZAMCELCO’s monthly power nominations to WMPC has not exceeded a daily average of 25MW, which is only half of the contracted capacity that was used as basis for WMPC’s charges,” it added.
The WMPC has cut off the power supply in Zamboanga City last February which resulted to rotational blackouts lasting for around two to three hours.
ZAMCELCO was able to install generation sets to address the city’s power shortage during peak hours and address voltage issues.
“We have put online 40 megawatts of generator sets. We have deployed it to our substations and directed to the feeder to address the voltage issues,” Crown Investment Holdings Inc. President Jomar Castillo said.
Furthermore, the Department of Energy is currently conducting an audit led by Electric Power Industry Management Bureau Director Mario Marasigan on the Zamboanga power situation.
Marasigan stated in a recent press briefing that supply is not an issue even with the unsettled payments with the WMPC as ensuring stable energy in Zamboanga relies with ‘reactive power’ which can be obtained through the power generating firm’s power plant providing ancillary service for voltage and frequency regulation.
ZAMCELCO intends to conduct its bidding for new power suppliers once its petition is granted by the ERC.
The electric cooperative likewise is eyeing to spend PHP 670 million as capital expenditures this year for the rehabilitation of its substations, upgrading of facilities and installation of digital meters with piloting of prepaid meters for selected customers.
The joint venture of Crown and Desco, Inc. won the investor-management contract for ZAMCELCO with a PHP 2.5 billion peso bid. Of the PHP 2.5 billion in capital infusions, PHP 1.2 billion was used to settle its outstanding debts. (PNA)
