At this point, many are already talking about the Primelectric and CENECO JVA. People are being encouraged to say YES to the JVA during the plesbiscite so that Bacolod City’s distribution utility will get its much-neede rehabilitation. But one concern that keeps coming up in social media is the trauma that people have experienced with Prime Water, the company that took over BACIWA. Water rates have gone up but the service left much to be desired. That is probably the main reason why people are hesitant about Primelectric. But here are the facts.
I would recommend you to Vote YES to the CENECO JVA. But I would not let you blindly do that. Instead, I encourage you to know more about the company that CENECO is marrying into. It is called Primelectric–the company behind MORE Power in Iloilo City and soon for NEGROS Power. Read more below. If you have more questions, please comment it and I will try my best to get you the official answers and facts.
Who is Primelectric?
Prime Water is owned by real estate mogul Manny Villar while Primelectric is owned by Filipino billionaire Enrique Razon, who is also known as the “Ports King”.
FAQ About Primelectric and Prime Water
Here are the answers to some frequently asked questions by CENECO member-consumers in Bacolod City and Central Negros regarding the Joint Venture Agreement (JVA) with Primelectric.
What are the 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. 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. When CENECO and Primelectric entered the JVA, CENECO’s distribution assets were valued at Php 2.4 billion. The new company 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 rehabilitations, upgrading, and modernization.
What will happen to the price of electricity under the JVA?
It will become cheaper!
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.
However, 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.
So instead, 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.
“There will be no increase, but a decrease in power rates in the JVA.”Statement from NEGROS Power
Does the JV Company have VAT? Yes!
Why? This is required by the BIR. CENECO also has VAT. However, VAT in NEPC will be lower because electricity bills are also lower. Negros Power can lower rates because most of the electricity will be sourced Renewable Energy, which is VAT-exempt.
Is CENECO being privatized or sold by Primelectric? No!
Why? 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 these facilities. 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 in 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!
Why? This is to ensure discipline in payments. Moreover, it is unfair to those who pay on time.
The good news is, your power will not be immediately disconnected and penalty is only 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? They will continue!
Why? The Brgy Electrification Program is funded by the National Government, not by CENECO. So, the allocation of funds by the National Government will not stop and the JV Company NEPC will implement it. In addition, NEPC itself has its own fund for the electrification of all areas under its jurisdiction.
Are we really the owners of CENECO right now? No!
Why? We do not have any documents right now that prove that we are the owners of CENECO. All we have are billing and disconnection notices.
The true meaning of MCO is member-consumer-only.
However, if the JVA is approved, CENECO can be converted into a true cooperative registered with the CDA, we will be given proof of ownership. That way, we can qualify to receive dividends from CENECO’s earnings, which will come from its 30% share in the Joint Venture Company.
These are the most common questions and concerns of CENECO members.
Is it clear now? We should not support this JVA between CENECO and Primelectric because this is the solution to our electricity problem. We have been complaining for the longest time. Now, we have a chance to have better service from a company that has a proven track record in our neighbor, Iloilo City. The service will improve and the price of electricity will go down.