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Bacolod City, Philippines Saturday, July 16, 2016
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Kepco recovery payment
will have ‘minimal impact'

The joint application for the approval and confirmation of the load factor-based pricing scheme of KEPCO Salcon Power Corp. with the Central Negros Electric Cooperative will have a minimal impact on power consumers, Julius Christian Reyes, KSPC Marketing Department assistant manager, said recently.

Reyes said the payment of the under recovery of P232 million, with the final amount subject to the Energy Regulatory Commission, might seem huge, but if broken down to cost per KWH on a span of five years, it is approximately only P0.0773 per KWH.

The amount represents the difference between the baseload price and the intermediate price of the 24MW capacity from July 2011 up to November 2013, Reyes said.

He said CENECO needed the additional 24MW on top of the 40 MW Power Sales Contract in 2007 to adequately respond to the growing consumption of its consumers, which the electric cooperative continues to utilize.

“Under the principles of fairness and equity, KSPC deserves to be paid for its expenses in ensuring that the 24MW additional contracted quantity is made available to the consumers,” he added.

For a household that consumes 100 KWH per month, the under recovery translates to only about P7.73 monthly, he said.

The 24MW additional capacity ensures power reliability for CENECO consumers when other power generating plants experience breakdowns or undergo annual maintenance, he also said. The additional capacity also protects the power consumers from the volatility of power prices at the Wholesale Electricity Spot Market, where CENECO buys power during peak hours, he said.

But prices tend to increase during peak hours and without the 24MW assured power at stable prices from KSPC, CENECO will have to source more power from the WESM, and this exposes consumers to very high prices, he also said.

Last June ERC held a hearing to give oppositors the opportunity to present evidence and witnesses, but they failed to produce them and refute KSPC and CENECO's joint application.

Lawyer Brick Reyes, and the Citizens' Crime Watch, filed an opposition to the ERC and the National Electrification Administration against the CENECO and KSPC's joint application, claiming that the multi-million differential billing will be a burden if passed on to the consumers.

Aside from the problem of KSPC's over-billing, Reyes said, the real problem is CENECO's over contracting of power; and consumers are paying for the power they did not use.*KBC



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