About a month ago, two ladies came to our store here in Bacolod City to conduct a survey if we are in favor of the CENECO JVA. In fact, at that time, I had very little knowledge about it. I even thought that JVA is the name of a private company. It was only after a media briefing that I learned that JVA stands for Joint Venture Agreement. It is going to be a partnership or agreement between CENECO and Primelectric to create Negros Power as the new distribution utility in Bacolod and Central Negros.
Considering the Primelectric JVA vis a vis the Service of Prime Water
The service of CENECO leaves much to be desired. Flickering lights like it’s Christmas every day, frequent unscheduled brownouts, very slow response time, and preposterous charges are my main complaints against CENECO. Now that there is this JVA to create NEGROS Power for a much better distribution utility, I am all for it. But of course, I also want to share the facts with you. It is much better for you to have an informed choice.
Going back to the survey at my place of business, I answered: “UNDECIDED“. That was because I didn’t know the facts yet about the JVA yet. I wanted to be objective so I tried to know the facts. Thankfully, I was given the chance to attend a blog conference with a representative from MORE Power, so I got the answers I needed. Moreover, I asked a friend living in Iloilo City about their experience with MORE Power, and he assured us that they have ample electricity plus lower rates.
Why did I ask about MORE Power? That is because NEGROS Power is going to be run by the same owner as MORE Power — Primelectric.
Facts About Primelectric
This is what I am trying to do now for all of you. Presenting to you the facts and also the FAQs about the Primelectric and CENECO JVA that will pave the way for the formation of NEGROS Power. Read on.
Foremost, Primelectric is not the same as Prime Water. So you can rest at ease that your concerns about BACIWA being run by a private company are unfounded. Primelectric is a totally different company owned by Filipino billionaire Enrique Razon.
Differences Between the JVA of BACIWA-Prime Water and CENECO-Primelectric
Here are the main differences between the JVA of BACIWA-Prime Water and CENECO-Primelectric
- BACIWA is a government-owned and controlled corporation (GOCC). Meanwhile, CENECO is not a GOCC but an electric cooperative corporation registered with the Securities and Exchange Commission (SEC).
- BACIWA entered into a JVA with Prime Water without a plebiscite. We just woke up one day and learned that BACIWA is now Prime Water. I believe that there are still people calling our water distribution utility BACIWA. Meanwhile, the CENECO JVA with Primelectric requires a plebiscite to be approved by the consumers.
- When Prime Water entered the JVA with BACIWA, they did not value or pay for BACIWA’s facilities. They just took over, period. When CENECO and Primelectric entered the JVA, CENECO’s distribution assets were assessed and valued at Php 2.4 billion. The new company then committed to pay 70% of the value plus they will immediately invest Php 2 billion. This will be used in capital expenditures for distribution system rehabilitation, upgrading, and modernization.
Will the Price of Electricity be Higher in the JVA? No!
Electricity rates will be cheaper, and therefore, our monthly electric bills will become lower, too!
Why? Despite the Php 1.7 billion that Primelectric will pay to CENECO for its distribution assets, there will be no increase in CENECO’s existing distribution charge of Php1.18.
Instead, there will be a decrease in the system loss that is passed on to us as consumers. From 8.25% for CENECO, it will become 5.5%, which means a decrease of 2.75% in the system loss that we pay. This means, there will be no increase, but a decrease in power rates in the JVA.
In fact, their sister company MORE Power in Iloilo City has the lowest rates right now compared to the electric coops in Western Visayas. Their rate is P11.65/KwH while CENECO’s is P12.78/KwH.
Does the JV Company have VAT? Yes!
Why? VAT is required by the BIR. But since VAT is computed based on total consumption, the VAT we will pay in NEPC will be lower because our electricity will also be lower.
Negros Power can lower rates because most of the electricity will be sourced from Renewable Energy, which is VAT-exempt.
Is CENECO being privatized or sold by Primelectric? No!
CENECO has always been a private institution. It was registered with the SEC as an incorporation in 1975.
What Primelectric is buying is CENECO’s distribution assets so that they have the authority to improve the facilities and therefore improve operations.
In the JVA, nothing will change in its juridical identity. CENECO will remain as it is and will continue to own 30% of the distribution utility company in the newly formed company called the Negros Electric and Power Corp. or NEPC.
Do consumers still have a voice in the Joint Venture Company? Yes!
Why? CENECO has 3 seats on the NEPC Board and one independent director who will represent us in policy and decision-making.
Will there be a penalty if I am late in paying? Yes!
In all our bills, we get penalized with delayed or non-payment. But the penalty is not immediate disconnection. Negros Power will only add 2% of the total overdue amount if you cannot pay after the 48-hour grace period.
This is different from CENECO’s one-bill policy, where your electricity will be cut off immediately and you will have to pay a 2% penalty before you can be reconnected.
What about the Brgy Electrification programs?
The Barangay Electrification Program will continue. It is funded by the National Government, not by CENECO. So, the allocation of funds by the National Government will not stop. Therefore, NEPC will continue to implement it. In addition, NEPC itself has its own fund for the electrification of all areas under its jurisdiction.
Are we owners of CENECO right now? No!
Why? We do not have any documents that prove we are the owners of CENECO. We are just consumers: owners of billing and disconnection notices.
But if the JVA is approved, CENECO can be converted into a true cooperative registered with the CDA. We will be given proof of ownership so that we can qualify to receive dividends from CENECO’s earnings, which will come from its 30% share in the Joint Venture company.
Let’s vote YES to JVA!
I hope this blog post clears some of your confusion. When the plebiscite time comes, please vote YES to JVA. I would also like to remind you that only registered accountholders are allowed to vote. So make sure that your CENECO account is updated so that you have a say in the plebiscite.
