The legal counsel of Energreen Power Development and Management Inc. said they will deliver the contracted power to Central Negros Electric Cooperative starting this month with the full delivery of 18 megawatts in May.
Ernesto Tabao said yesterday that this is the result of the extension of the delivery date granted by the Ceneco Board to Energreen that will deliver power to Ceneco on a staggered basis.
Ceneco entered into a 15-year contract with Energreen on August 5, 2013 for thediesel plant to supply Ceneco 18.9 MW “peak and reserve” power from 2015 to 2029.
The memorandum of agreement aims at improving power reliability in Ceneco’s distribution system and to protect its member consumers from volatile spot market prices by relying more on predictable contracts with a maximum price of approximately P12.50 per kwh according to the MOA’s pricing formula.
Majority of the Ceneco directors rejected the first recommendation of its technical and legal management to rescind the contract for Energreen’s failure to deliver contracted power to Ceneco on Feb. 26 as provided in the MOA between the two parties, during its special board meeting Friday.
Those who voted for the extension were directors Michael Maravilla, Roberto Montelibano, Joyce Martha Cuenca, Paul Lizares, Vicente Tan and Edward Gasambelo.
Ceneco president Arnel Lapore and directors Zenaida Lacson and Robert Javellana voted for the rescission of the contract.
Lapore said he voted for its rescission because of Energreen’s uncertainty in delivering power to Ceneco. They will also meet with Energreen to discuss problems involving transmission lines, he said.
Tabao said Ceneco extended the contract because it understood the conditions that prevented Energreen from delivering power on the target date, such as force majeure, and because it proposed to deliver replacement power to Ceneco.
However, Ceneco refused to accept the replacement power because they did not need it then, he said.
Under the contract, there is a provision of replacement power in case they cannot deliver on time, Tabao said.
Vicente Petierre lll, legal counsel of the Utilities Consumer Alliance of Negros, said they will file a manifestation asking the Energy Regulatory Commission to direct Ceneco to provide them copies of the Board resolution extending the delivery date of Energreen.
They will also ask for a copy the minutes of the Feb. 27 special board meeting of Ceneco to find out the individual opinions of the directors who voted for the extension, despite the recommendation of the technical and legal management of Ceneco for rescission and renegotiation, he said.
Petierre also said the six directors, who voted for the extension of the delivery date, did not consider the stand of the member-consumers and appear to be lawyering for Energreen.
If Energreen claims that they are ready to deliver replacement power, did they write Ceneco? Did they also inform Ceneco why they were not able to deliver power? He asked.
UCAN is not opposing for the sake of opposing because they know that Ceneco will need power when investors will come in, Petierre said.
All they want is for Ceneco and Energreen to be transparent. They also noted that the cost offered by Energreen is higher than those of other independent power producers when the diesel plant is embedded or located in the province, Petierre added.*CGS.
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