ERC urges Zamcelco and power supplier to honor compromise deal

posted May 16, 2019 at 08:35 pm
by  Alena Mae S. Flores
The Energy Regulatory Commission asked the Zamboanga Electric Cooperative and power supplier Western Mindanao Power Corp. to honor their compromise agreement and restore power services in Zamboanga City.

“They have already agreed. They have points of agreement and they are now online, supplying power which is what’s important,” ERC chairperson Agnes Devanadera said.

WMPC and Crown investments Holdings Inc., the investor-manager of Zamcelco, earlier signed a compromise agreement to resume power delivery to Zamboanga City. 

The compromise agreement was signed on May 3, a few days after the ERC held a hearing on the petition of the power supplier to resolve the dispute.

“They will be forced to agree. What should they quarrel about? The more they fight, it will result in no supply, no electricity. They really have to talk. They can agree to disagree but they have to make sure that power is there. I said to one of them, it’s not a matter of legal doctrines.  It’s a matter of you delivering the service,” Devanadera said.

“I believe they’d have to agree. They will not get all the terms that they want but they have to agree somewhere because it will have a huge effect on their business,” she said.

The deal was Crown’s third offer of partial payment to cover the operational and fuel costs of WMPC, owned by the Alsons Group. 

Crown initially offered to pay P150 million in February before raising its proposal to P220 million on April 3. WMPC rejected both offers.

Under the compromise, Crown will give a partial payment of P220 million to WMPC. WMPC will then run its power plant for 60 days after receiving the full payment.

“We have been trying to settle with WMPC for three months now. We are glad that WMPC finally accepted this compromise. With this, we can stop rotational brownouts and stabilize electricity in the city,” said Crown representative Jomar Castillo.

The resumption of the WMPC’s operations provides immediate relief to residents and businesses that have been reeling from the effects of power outages lasting up to six hours a day.

“We are glad to restore power and normalcy to Zamboanga City,” said Joseph Nocos, vice president for business development of WMPC and the Alsons Power Group.

The compromise, proposed by Zamboanga City mayor Maria Isabelle Climaco-Salazar, is a temporary measure to address the power outages in Zamboanga City pending the legal dispute filed with the ERC.

“By signing the compromise agreement, we reaffirm our commitment to being Zamboanga’s partner for growth in the long term,” Nocos said.

The Zamcelco official said the compromise agreement was without prejudice to the respective claims of both parties before the ERC.

Crown discovered through a financial audit in late January that WMPC allegedly over-billed the co-op in the amount of P441 million from 2015 to 2018. 

Zamcelco claimed WMPC billed the coop for capacity recovery fee and operations and management without basis, citing that the power supply agreement with the co-op was not yet in effect. 

WMPC also allegedly billed the co-op for a contracted capacity of 50 megawatts, when Zamcelco nominated a daily average of 25 megawatts, or 50 percent less than the amount the cooperative paid for.

Crown-Zamcelco sought a refund of the overpayments with the ERC.

“As the new investor-manager, we are looking out for Zamboangueños after years of mismanagement of the city’s power co-op. Zamboangueños were made to pay more than what they should have. We want to return their money to them,” Castillo said.

Topics: Energy Regulatory Commission , Zamboanga Electric Cooperative , Western Mindanao Power Corp.
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