The Energy Regulatory Commission has cleared the Central Negros Electric Cooperative of any administrative liability for its failure to remove its inter-class cross subsidy on time.

“There being no violation committed, (CENECO) is hereby exonerated from any administrative liability,” ERC's two-page decision dated Dec. 12, 2007 released on Jan. 8, 2008 through its website.

The inter-class cross subsidy was the amount previously charged by CENECO to industrial and commercial end-users to reduce rates for residential end-users.

ERC said it issued CENECO, among other distribution utilities, a show-cause order on Nov. 3, 2006 asking it to explain why no administrative penalty and/or criminal action should be imposed upon it, and/or against directors and officers for the violation.

This was after the ERC directed CENECO on Sept. 6, 2005 to completely remove its inter-class cross subsidy to be implemented simultaneously with the final rate reduction due to loan condonation pursuant to an ERC decision.

But the ERC exonerated CENECO after its representative Jose Tadlas, informed a conference on Sept. 27, 2007, that CENECO received the Sept. 6, 2005 order only on Nov. 11, 2005.

Considering this, ERC said, CENECO was able to implement its inter-class cross subsidy removal only in its December 2005 billing period as shown in the consumer bills.

This was done in accordance with the ERC directive for it to implement the inter-class cross subsidies in the next billing from receipt of the order dated Sept. 6, 2005, it added.

The condonation rates were computed by the ERC based on the CENECO loans condoned by the National Electrification Administration in compliance with the Electric Power Industry Reform Act or the Republic Act 9136.*NLG

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