Business: Ceneco to Consumers: Brace for Series of Cost Increases Estimated P0.80 (2)
Independent Power Producers (IPPs) supplying Central Negros Electric Cooperative, Inc. (Ceneco) are set to impose their contracted passed onelectricity costs agreed based on market factors at its inception and final approval pending in the Energy Regulatory Commission (ERC).
File photo of media outlets, independent writers and broadcasters attended last December 7, 2011 Ceneco Press Conference considering the unpredictable electricity cost increases hounding consumers.* (Gil Severino photo)
These IPPs are Kepco-Salcon Power Corp. (Kepco), Green Core Geothermals Inc. (Green Core) and Panay Energy Development Corp.; their contracts with Ceneco come in differing pricing schemes and character.
In a letter signed by Ceneco General Manager Sulpicio Lagarde, Jr., published by NDB April 26, 2012, ERC had already "approved Commissioning Power Sales Contract rate at Php 2.8729/kWhr. As a result, Kepco is entitled to collect a billing differential of Php 1.2824/kWhr retroactive for the period covering October 2010 to February 2011."
Retroactive price differential stemmed from the ERC approved P1.5905 per kwh provisional price last October 2010 until the approved above stated rate of P2.8729 per kwh; this translates to ERC authorizing Kepco "to recover from CENECO the billing differential amounting to Php0.66/kWhr or a total of P31,161,223.08."
Lagarde’s letter read, "In order to cushion the impact to member-consumers, the CENECO Board passed a resolution requesting KEPCO and ERC to extend the recovery period from one month at 66 centavos/kWhr to one year at 55 centavos/kWhr."
Ceneco, meanwhile, had inked supply contract also with Green Core last January, 2012 at an ERC approved provisional authority electricity cost of P5.20 per kWhr; this contract is pending before ERC.
At the duration of the ERC approval process, Ceneco charged consumers at an old National Power Corporation-Time of Use Rate (Napocor TOU) which is P4.00/kWhr.
The Napocor-TOU rate is a government subsidized pricing scheme therefore not affected yet by market forces therefore it is much lower than IPPs.
Upon ERC approval, which usually takes six months, Green Core like Kepco will be authorized also to collect the P1.20 differential or variance from its provisional authority of P5.20/kWhr as stated above, from January 2012 to the time of ERC approval.
The Panay Energy Development Corp. (PEDC), on the other hand, has a billing assessment of P192,064,798.50 consumed two summers ago.
This is likewise pending before the ERC and Ceneco is yet to run a simulation computation to translate this to the per kWhr basis.
Ceneco assured its consumers that the ERC rule on P0.10 ceiling cap applies to all passed on electricity cost increases.*
(Tomorrow: Exchange Rate differentials and Ceneco’s CAPEX)