If the Central Negros Electric Cooperative will not recognize its power supply contract with Manta Energy Inc., that is their right, MEI spokesperson Gerry Llena said yesterday.
CENECO issued a statement that it has no power supply contracts with IN2 Power or its new name Manta Energy.
Llena said CENECO claimed that it has no contract with MEI but they have impliedly accepted that they have entered into a contract with IN2Power for intermediate power of 22 MW.
He said MEI and IN2Power are one and the same entity and the change of name has nothing to do with the contract.
CENECO general manager Sulpicio Lagarde Jr. said the IN2Power contract claimed by MEI was not approved by the CENECO Board although it had the signature of former CENECO president Vicente Sabornay.
He said the CENECO Board rejected the IN2Power contracts on Nov. 9, 2010 per Board Resolution 836 and this was not approved by the National Electrification Administration.
All these happened during the time when he was terminated by Sabornay, he added.
Llena said the Securities and Exchange Commission has accepted the change of name and the Energy Regulatory Commission has recognized the change of IN2Power to MEI.
Basically, it is a non-issue because ERC will not take cognizance of their application if it does not recognize the change of name, he said.
Llena said the contract entered into by CENECO with IN2Power stipulated that after seven days from signing, CENECO has to apply for approval of the contract with the ERC.
But since CENECO did not do anything, MEI was forced to apply on its own, making CENECO an unwilling co-plaintiff or co-applicant, he said.
When the ERC took cognizance of the application, it was just like all the defects had been erased, like the question on the change of name, Llena said.
Once the application is approved by ERC, CENECO can no longer ignore the enforceability of the contract it had signed with MEI in March of 2009, he said.
Llena said that, under the ERC rules and the EPIRA Law, distribution companies like CENECO should only provide supply rate to consumers in a least-cost manner. Otherwise those who violate them will face civil and criminal liabilities as in the case of MERALCO, that ERC ordered to refund the exorbitant cost of electricity charged to consumers, he said.
Llena said CENECO claimed that their contract with MEI was rejected but they are referring to another power sales contract which they had with KEPCO for power supply of 24 MW. This is contained in Board Resolution 9222, he said.
During a public hearing conducted by the Bacolod Sangguniang Panlungsod, MEI offered P6.67 per KWH, while Panay Electric Development Corporation that CENECO preferred to supply them energy, offered P7.76 excluding VAT, or P8.51 per KWH with VAT, Llena said.
Lagarde said the MEI petition with ERC is improper because if a distribution utility has a contract with a generator, the one who should apply for approval is the distribution utility and not the agent.
MEI is only a broker and CENECO does not need a broker to buy power since it can buy direct, he said.
Lagarde asked why In2Power abandoned its contract with the Camarines Sur Electric Cooperative. Because of that the electric cooperative was forced to get power from WESM at a higher cost, he said.
He said he would prefer to face them in court rather than enter into an illegal contract.*CGS