The Central Negros Electric Cooperative (CENECO) has assured its members that there will be no shortage of power if Kepco-Salcon Power Corporation (KSPC) terminates their 20-megawatt contract with the cooperative by the end of January 2022.
CENECO’s assurance comes after the company confirmed in a virtual press conference today, January 20, that it received a demand letter from KEPCO on January 14, demanding payment for the settlement of its Php 280,298,294.20 arrears within 15 days.
Engr. Norman Pollentes, CENECO’s cooperative corporate planning manager, explained that the demandable amount is currently pending before the Energy Regulatory Commission as a result of a Supreme Court ruling requiring all power supply agreements (PSA) submitted by Distribution Utilities (DU) to the ERC on or after June 30, 2015 to go through a competitive selection process (CSP).
He further said that the accumulated arrears represent the difference in KSPC’s Time-of-Use billing at P5.44 per kilowatt hour computation as compared to the National Power Corporation- TOU rate of P3.60/kWH. He underscored that the electric cooperative has been cautious in paying KSPC since the start of the PSA extension in accordance with ERC Reso No. 16, Series of 2009.
Currently, CENECO is getting a reduced capacity of 20 MW or half of the 40 MW that it previously contracted with the KSPC.
In the event that KSPC terminates the power supply agreement by end of January 31st, Pollentes said that CENECO can still get power supply from the Wholesale Electricity Spot Market but this would mean higher prices due to the law of supply and demand principle, as compared to PSA which offers a more stable pricing. In turn, this will impact the per kilowatt charges billed to electric consumers.