Forgive me for my ignorance. I have seen several posts on social media opposing the CENECO JVA, which is going to privatize CENECO. I honestly thought that JVA would be the new company but I was so wrong! Recently, I attended a briefing about this proposed arrangement for CENECO and it was the only time that I learned that JVA actually stands for Joint Venture Agreement. Haha… Now, I just feel so dumb! So, yes, CENECO is moving to have a JVA with a company called Primelectric and the resulting partnership will be called NEGROS Power. Read more to learn about what this is going to be a better choice or alternative for all of us Bacolodnons and neighboring cities serviced by CENECO.
NEGROS Power: The Joint Venture Between Primelectric and CENECO
I have come to fully understand that a private company (known as Primelectric) will have a joint venture with CENECO to become the new Distribution Utility (DU) for Bacolod City and neighboring cities and municipalities. CENECO will still be in the picture, as it will remain a partner, but the new NEGROS Power will have more money to finance capital expenditures like repairs, new equipment, more manpower, as well as a steady supply of energy.
I admit that I had been very vocal about my frustrations regarding the service of CENECO. We often get frequent unscheduled power interruptions as well as very long-scheduled ones. Then there are fluctuations. Since we are business owners, reliable electricity is very important for us. For example, we are in the business of large-format printing. While printing a large banner, a 5-minute power interruption occurred. Those 5 minutes will cancel the printing process and would not continue in the same spot. It will be to be reprinted, meaning, new material needs to be cut and more ink is used. Imagine the wastage. It also means effort for me to turn on the generator for backup power needed to at least light up our establishment.
Look at my post from years ago.
I thought there is no longer any hope for CENECO to improve. But now, we learn that we can have better service, and a more reliable electricity supply, at lower rates. I want to give NEGROS Power a chance. But I agree, like in marriage, we have to know our future partner well before we enter into the agreement. So here are the pertinent things we need to know.
NEGROS Power is here to help us. But we have to vote first. I am hoping that I can help sway you to give the CENECO JVA a chance.~Daddy Dennis
Who is Prime Electric?
If you are my age or even older by a decade, we only know CENECO as the electric cooperative that had serving our homes.
Primelectric is the new player, which is actually the sister company of MORE Electric Power Corporation (MORE Power). It is the distribution utility (DU) in Iloilo City that had been operating for the last 3 years with very good consumer feedback. A friend of ours in Iloilo said that their rates are lower and the brownouts are not very common, which are supposed to be the main things that we should be getting from the electric company, right?
Primelectric is managed by experts in the electricity industry. It is a Filipino company owned by the billionaire Enrique Razon whose main thrust in this business is consumer-centric.
Operations are handled by Mr. Roel Z. Castro, President and CEO of MORE Power in Iloilo and the Negros Electric Power Corporation (NEPC) or NEGROS Power in Negros Occidental.
In Iloilo City, MORE Power has done a lot in modernizing the Power Distribution System, which is really what I am looking forward to for Bacolod City. The company has spent more than P2 billion since it started operations 3 years ago, which was spent mostly on new infrastructure and equipment. Another P1 billion has already been allocated for further improvements and expansion for the next 2 years.
In just a short span of time, MORE Power was able to increase the capacity of existing substations, by building new substations, and even purchasing mobile substations used during repairs.
How NEGROS Power Can Possibly Benefit the Consumers
These are the things that can make us decide if it is worth shifting to the new company. After all, the changes in CENECO management would mean nothing if we consumers do not feel it. For us in Bacolod, we can look at how MORE Power has been managed in Iloilo because the operations will be mirrored here. There is no doubt that MORE Power has the capacity, willingness, as well as funding needed to make tremendous developments to electricity distribution in Bacolod City.
Lower Electricity Rates
Perhaps the biggest thing we can feel would be the lowered rates. If you are like us, we dread receiving our CENECO bill every month because it seems that despite our best efforts to control our electricity use, our keeps spiraling out of control.
Meanwhile, since MORE Power started operating in Iloilo in 2020, the system loss generated has decreased from a staggering 30% to just merely 5.5%. Do you know that system loss is part of our electric bill?
With CENECO, system loss generated at present may only be 11%, but that is still above the allowable cap of ERC–the limit that CENECO can pass on to consumers. They have passed on around 8% to the consumers. So we are paying for what we are not using or what the DU lost for whatever reasons! If the DU can lower system loss, it will also translate to lower rates. It may not be possible to completely eliminate system loss, but 5.5% is still lower than 8.25%. Besides, lower system loss is also beneficial to a private company–it also means an increase in profit, so they will try to eliminate it as much as possible.
Competitive Selection Process (CSP) and Buying from Renewable Energy Sources
MORE Power does not use energy from coal only. Instead, it has been prioritizing sourcing power from renewable energy suppliers, which enables them to buy cheaper power. The company also employs a Competitive Selection Process (CSP), or bidding, and 24/7 monitoring by the trading team to buy cheaper electricity from the Wholesale Electricity Stock Market (WESM).
For three years now, Ilonggos are enjoying much cheaper electricity rates because of the efficiency of MORE Power.
Less unscheduled brownouts
Let’s face it, CENECO is an old company that has not been buying new equipment and machines like upgrading the substations and purchasing a mobile substation. That is why, very mundane everyday occurrences can mean hours of “unscheduled power interruptions”. MORE Power reduced the number of unscheduled brownouts in Iloilo City through system rehabilitations and other modern strategies.
Efficient and faster customer service
Since I am the one always calling CENECO when there are problems or brownouts at home, I can say that CENECO Customer Service only rates 2/10 for me. Yes, it is short of saying, it sucks.
In Iloilo City, MORE Power has employed a 24/7 helpline that answers and acts upon all calls and chats regarding consumer concerns. They do not just answer, but these concerns are immediately relayed to response teams already prepositioned in the field. This means faster turn-around time for repairs so that power gets restored.
Efficient application for new accounts.
MORE Power has made it easier for informal settlers to get a legal electricity connection. The company wanted to rehabilitate the people’s mindset against tapping electricity (which is tantamount to stealing) as well as provide easier ways for them to get connected. This is one of the biggest reasons why system loss is much lower in Iloilo City compared to what we pay here in Bacolod.
Looking at CENECO Right Now
CENECO has served Bacolod City for the longest time. In my case, I was “born” into the system and I am already 48 years old this year.
Almost 50% of its facilities, such as substations, are already 30 years old. Bacolod City has been booming, with new infrastructure and townships developments that need so much power supply. CENECO can no longer meet the electricity demand of these new businesses and developments, which is the reason why all consumers are affected.
Moreover, seeing how CENECO is not efficiently operating, the Energy Regulatory Commission (ERC) has not approved its application for Capital Expenditures (CAPEX) since 2011.
No funding means no power to buy modern equipment that can cater to the needs of a growing cosmopolitan city.
Super High Rates, Bad Service
CENECO steadily reaches a monthly system loss of 11%, which is above the 8.25% allowable cap of the ERC. This translates to about PhP 20 million pesos of losses per month. What do they do? Pass it on the electric bill of their consumers. Yet, since only 8.25% can be passed on to consumers, system loss above that is a loss of profit.
CENECO’s Franchise to Operate
Contrary to what we think because of its name, CENECO is not a licensed COOPERATIVE, which is why we consumers (or members) are not getting profit shares. We just continue to pay for system loss.
Moreover, CENECO’s franchise to operate is already expiring in 2030. If they re-apply with their current situation, their franchise will surely be DENIED. It is just a few more years, which means that the market will be open. And yes, with Bacolod City as a big city, many companies will scramble for the franchise to operate Bacolod’s DU.
The Joint Venture Company, which is run by the same company with a good track record, will be able to apply for a new franchise with Congress. With their accomplishments in Iloilo, NEGROS Power will surely be granted the franchise to operate for the next 25 years.
Do you want to keep on paying for system loss? If not, say YES to JVA!
What to Expect With the Prime Electric and CENECO JVA
If CENECO signs the joint venture company with Primelectric and becomes NEGROS Power (NEPC), these things will happen:
- Prime Electric/NEPC (Negros Power) will pay PhP 1.7 billion pesos in cash for 70% of the appraisal value of CENECO’s distribution assets.
- With the cash, CENECO can pay its debts, return bill deposits to consumers (which they should have done already), as well as provide separation and retirement pay to its employees.
- The remaining cash can be returned to our member-consumers as patronage refunds.
For CENECO employees who are working there in the right capacity, there is no need to fret. Qualified CENECO employees will be given priority to work in the new Joint Venture Company.
Primelectric/NEPC (Negros Power) will invest an initial PhP 2 billion in CapEx Fund upfront. This will be used for the immediate modernization, rehabilitation, and upgrading of the distribution facilities not just in Bacolod City but also in all the areas covered. CENECO is currently serving the cities of Talisay, Silay, and Bago as well as the municipalities of Murcia and Don Salvador Benedicto in Negros Occidental.
Furthermore, the Joint Company to be established will contract new power supplies through fair negotiations and the Competitive Selection Process (CSP) or bidding. Renewable energy and the cheapest suppliers win. So, the consumer also wins.
24/7 customer support
NEGROS Power service will be more consumer-friendly. There will be a 24/7 chat and call hotline as well as stand-by teams for consumers’ needs.
Money Back Through Dividends
NEGROS Power is a partnership of 2 companies: Primelectric and CENECO (yes, CENECO will still be in the picture). When the dividends of Primeelectric/NEPC and CENECO are divided, 30% will go to CENECO. Then CENECO can give dividends to its true member-consumer-owners.
The Public’s Mandate
I understand the hesitance though. A few years ago, we just received news of the takeover of BACIWA–the city’s water utility. Sadly, the new private company that took over gave us bad service…worse than BACIWA was before. Plus, the rates are even higher and we are now paying taxes for water.
But on the other hand, we have seen that Primelectric’s track record, as its sister company, MORE Power has now been the DU in Iloilo City for the last 3 years. Iloilo’s power supply is in excess plus the electric rates per kilowatt hour are the lowest in the country. Service is fast, efficient, and available 24/7. Based on what I have heard and read, I am already quite convinced that they will do a better job as operating partners of CENECO. I believe that with a more efficient DU, our lives will become better and more investors will also put up new businesses in Bacolod City.
Now, I understand the roles of power plants, the national grid, and the DU in bringing electricity to the consumer. Our current DU is CENECO and it is not very efficient in managing power distribution, hence we do not get stable power. DUs do have a big role to fill in delivering electricity. In this instance, we are now given a choice of who will manage the DU. Would you still prefer the current DU (CENECO) or the modernization that NEGROS Power is committing to give us?
I am for better service. It is time for a change. It is time to give this Primelectric and CENECO JVA a chance. So let’s say YES to JVA and give way to NEGROS Power.
YES to JVA! YES to NEGROS POWER!