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SAY YES TO CENECO/PRIMELECTRIC JVA

With the ongoing discussions about the joint venture agreement between CENECO and PRIMELECTRIC/NEPC (Negros Power), here are some facts that may help enlighten and answer consumers’ concerns regarding the JV.

There have been talks comparing this agreement with that of the JVA made between the Bacolod City Water District (BACIWA) and Prime Water. The differences between these 2 JVAs are as follows–

Prime Water is owned by Mr. Manny Villar while Primelectric is owned by Mr. Enrique Razon.
BACIWA entered into a JVA with Prime Water without a plebiscite. The CENECO JVA with Primelectric requires a plebiscite to be approved by the consumers.
BACIWA is a government-owned and controlled corporation (GOCC). CENECO is not a GOCC, but an electric cooperative corporation registered with the SEC.
When BACIWA entered the JVA with PrimeWater, they did not value or pay for BACIWA’s facilities. When CENECO and Primelectric entered the JVA, CENECO’s distribution assets were valued at 2.4 billion pesos and they committed to immediately invest 2 billion pesos in capital for distribution system rehabilitations, upgrading, and modernization.

WHAT HAPPENS TO THE PRICE OF ELECTRICITY

According to Primelectric/Negros Power, electricity will get cheaper! And this is all that we want, right?

Why? Despite the 1.7 billion pesos that Primelectric will give to CENECO, there will be no increase in CENECO’s distribution charge of 1 peso and 18 centavos.
However, there will be a decrease in the system loss that is passed on to us as consumers.
From 8.25 % for CENECO, it will become 5.5% which means a decrease of 2.75%in the system loss that we will pay. So, there will be no increase but a decrease in power rates in the JVA.
Their sister company MORE Power in Iloilo City has the lowest rates right now compared to the electric coops in Western Visayas.
Their rate P11.65/KwH while CENECO’s is P12.78/KwH.

VALUE ADDED TAX (VAT)

Another factor that will contribute in the lowering of the rate is the VAT. NEPC/Negros Power, like CENECO, will still be required by the BIR to pay VAT. However, the rate will be lower because most of the electricity will come from Renewable Energy which is VAT exempt.

PENALTY FOR LATE PAYMENT

Penalty for late payment will be implemented to ensure discipline and because it is unfair to those who pay on time. The penalty is only 2% of the total overdue amount if you cannot pay after the 48-hour grace period.
Now for the good news! Your electricity will not be cut off immediately. This is different from CENECO’s one-bill policy, where your electricity will be cut off immediately and you will have to pay a 2% penalty before you can be reconnected.

CENECO WILL REMAIN AS IS

The JVA does not mean that CENECO is being privatized or sold. Because CENECO, as many Negrenses know, has always been private, since 1975.
What Primelectric is buying is CENECO’s distribution assets so that they will have authority in implementing the needed improvements on the facilities.
In the JVA, nothing will change in its juridical identity.
CENECO will remain as it is and will continue to own 30% of the distribution utility company, Negros Electric and Power Corp. or NEPC. This means, that when the dividends of Primelectric, NEPC and CENECO are divided, 30% will go to CENECO and they will be able to give dividends to their member-consumer-owners.

ARE WE THE OWNERS OF CENECO?

We do not own CENECO. At present we do not have any documents that can prove that we are the owners of CENECO. All we have right now are billing and disconnection notices. The true meaning of MCO is member-consumer-only. However, if the JVA is approved, CENECO can be converted into a true cooperative registered with the CDA and we will be given proof of ownership so that we can qualify to receive dividends from CENECO’s earnings, which will come from its 30% share in the Joint Venture company.

Consumers will still have a voice in the Joint Venture Company because CENECO has 3 seats in the NEPC Board and one independent director who will represent us in policy and decision making.

The Barangay Electrification Program will continue as this is funded by our National Government and not by CENECO. So, the allocation of funds by the National Government will not stop and the JV Company NEPC will implement it. Also, NEPC itself has its own fund for the electrification of all areas under its jurisdiction.

With the support of the consumers for the JVA between CENECO and Primelectric, definitely it is their welfare that will be the company’s utmost concern. If the JVA will be finalized, low electricity rate and improved service will be Primelectric’s main goals as they work hand in hand with CENECO. This is what saying YES TO JVA is all about.

Vote YES to JVA!