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Egay Uy .

ENGINEER David A. Tauli, a retired senior vice president and head of the Engineering Division of Cagayan Electric Power and Light Co. Inc. (Cepalco), is now actively involved in the development of solar-powered generating plants which are expected to lower the cost of electricity to the end users.

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Before his retirement, he also used to give life to the foresights of the late Cepalco chairman, Ramon Abaya.  Dave is also the president of the Mindanao Coalition of Power Consumers, an advocacy group that aims to protect the rights of consumers against unreasonable hikes in the price of electricity among other objectives.

Recently, he submitted a complaint to the City Committee on Energy to question the contract that Moresco 1 entered into with a coal-generating company, allegedly without the benefit of competitive bidding, hence resulted in a much higher price to Moresco 1 end users.  As estimated, the “overprice” was about two pesos per kilowatthour (kwh) which was passed on to end-users because generation is a pass-through charge.

As to Cepalco, Engr. Tauli has this to say: “There was a time when Cepalco management gave top priority to their customers and worked to ensure that they are given good services and that the rates that they pay are fair and reasonable. Those days are long gone.  Today, Cepalco customers are forced to pay unfair, unreasonable, and onerous rates because Cepalco entered into an anomalous power supply contract with the Minergy Power Corporation that owns the 110-mw coal power plant in Balingasag, Misamis Oriental.”

Cepalco is listed among 16 electric distributors in Mindanao in a complaint he sent to the Energy Regulatory Commission.  The power supply contracts of these firms ought to be reviewed because they are either entered into in violation of Epira requirements for power supply contracts, or they contain provisions that result in onerous rates for consumers, according to Engr. Dave.

Engr. Dave also suggests for consumers and consumer groups in the Cepalco franchise area to send follow up letters to the ERC so that it will review the Cepalco power supply contract with the Minergy Power Corporation, and “delete or revise the offensive provision in the contract.”

He said, “The iniquitous provision in the Cepalco-MPC power supply contract is stated this way (as worded in the application submitted to the ERC for approval of the contract):  Energy Delivery – Minergy Coal guarantees to deliver electricity to Cepalco 62,050 mwhr per month as Minimum Energy Off-take and 100 mw as guaranteed capacity.”

He says it needs “engineering knowledge to understand how this provision results in onerous rates, but what the provision does is to force consumers to pay for electricity that they did not consume. This happens because Cepalco must may MPC at every monthly billing for a fixed quantity of demand measured in kilowatts and a fixed quantity of energy measured in kilowatthours even if not all of those quantities of demand and energy are actually delivered to Cepalco.”

“The end result of paying for unused electricity is that the consumers will pay for electricity from the MPC coal plant at a rate that is two to four times as much as the approved rate (at base load, or 100% load factor) for the MPC power supply.  For example, in July 2018 consumers actually paid more than P15 per kwh for power supply from MPC, and not the approved rate of around six pesos per kwh.”

Dave added that for July 2018, Cepalco’s average rate of P7.55 per kwh for the generation component was the highest among all distribution utilities in Region 10.  Iligan Light and Power had the lowest at P4.71 per kwh.  Moresco 2 had the second highest at P7.43 per kwh.

Engr. Tauli also suggests for Cepalco customers to “also send petitions to” the mayors of Cagayan de Oro, Tagoloan, Villanueva, and Jasaan, and to the governor of Misamis Oriental to request them to “officially summon the Cepalco management to explain … why Cepalco is now charging onerous rates to consumers and to explain also how Cepalco intends to correct the unfair and unjust rates that they are now charging their customers.”

So do we have a coal mine in our midst?  Simply suffocating.

 

(Lawyer Jose Edgardo Uy is a retired senior executive of Cepalco.)

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