Is it valid? Gatchalian urges DOE, ERC to probe joint venture between CENECO, NEPC

Senator Sherwin Gatchalian called on the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) to conduct an independent investigation on the validity of a joint venture company operating in Negros Island.
 
Gatchalian, vice chairman of the Senate Committee on Energy, was referring to the validity of a plebiscite conducted to ratify the joint venture agreement (JVA) between Central Negros Electric Cooperative (CENECO) and Primelectric Holdings Inc./ Negros Electric and Power Corp. (NEPC).
 
The venture has committed to invest up to P2.1 billion over the next five years to rehabilitate and modernize the distribution system, which is crucial to having a steady and affordable supply of electricity for the consumers on the island. 

The company also committed to invest P200 million for its sitio electrification program. CENECO’s coverage area includes the cities of Bacolod, Bago, Silay, and Talisay; and the towns of Don Salvador Benedicto and Murcia.
 
“Frequent power outages have been a recurring issue in Bacolod and Negros inconveniencing residents and businesses,” stressed Gatchalian, who noted that CENECO has been breaching the benchmark of 8.2 percent for system loss, and posted a system loss of 11 to 12 percent prior to the execution of the JVA. The senator said this only indicates the need for additional capital expenditure to improve efficiency.
 
Some consumer groups claim the plebiscite, which was conducted from June to August last year, lacked the necessary legal validity because it wasn’t duly approved during a CENECO general assembly as provided by the cooperative’s by-laws. These consumer groups also claim they have filed several petitions before the ERC,which the agency has not acted on.
 
“The ERC should provide the reasons for its inaction and should address the allegations of irregularities in the conduct of the plebiscite,” said Gatchalian, who added that the DOE was well-placed to conduct an independent inquiry and fact-finding on the issue as the chairman of the National Electrification Administration (NEA) board.
 
“Conduct an independent inquiry on the plebiscite for the JVA, and investigate everything related to this agreement,” Gatchalian told representatives of the DOE and ERC during a recent hearing conducted by the Senate Committee on Public Services on the franchise application of NEPC.