Give the Primelectric and CENECO JVA a chance. Learn more about it. Have you been complaining about the bad service of CENECO here in Bacolod City? Or probably the unreliable supply of power and long blackouts? Have you been clamoring for a change or have you already accepted CENECO as it is, lock, stock, and barrel, because we are third world?
But now, there is something brewing in Bacolod City. We see posters about a CENECO JVA. Some people thought that a new electric company called JVA is coming in. Now, the public wants to know more. In this series, this blog will become an avenue to tackle some questions, give answers, and clarify some concerns about the up-and-coming Primelectric and CENECO JVA. Read more.
What is the Primelectric and CENECO JVA
First and foremost, JVA, as we see on the posters on the streets, is not the name of an electric company. It simply stands for Joint Venture Agreement (JVA). It is a partnership between Primelectric and CENECO, hence it is called Primelectric and CENECO JVA.
What we see on the posters is a call for people to vote (registered CENECO consumers) in the plebiscite, approving the JVA between the two companies for the improvement of the electricity supply in Bacolod City and other areas served by CENECO.
Who is Primelectric?
For most people of Bacolod, we only know about CENECO—the only electric cooperative that had been in operation from the time we were born. Despite all the problems and complaints, it is the only one we know.
But who is Primelectric? Why are they here? Let’s get to know them.
Primelectric is the sister company of MORE Electric Power Corporation (MORE Power) that has been operating as a distribution utility (DU) for the last 3 years in Iloilo City. It is a Filipino company owned by billionaire Enrique Razon, who is popularly known as the “Ports King.”
Meanwhile, Mr. Roel Z. Castro is the President and CEO of MORE Power. He will hold the same capacities in the Primelectric and CENECO JVA that will henceforth be known as Negros Electric Power Corporation (NEPC) or NEGROS Power.
MORE Power Track Record of Service
MORE Power is managed by experts in the electricity industry. But more than that, they are known for their concern for the welfare of their consumers.
In Iloilo City, MORE Power has done a lot in modernizing the Power Distribution System. The company has spent more than PhP 2 billion pesos in the last 3 years, mostly on new infrastructure and equipment. It has also allocated an additional PhP 1 billion pesos for the next two years.
Due to the available capital, MORE Power was able to:
- Increase the capacity of existing substations
- Build new substations
- Purchased 2 mobile substations
Improvements Felt by Consumers
The company profile may be impressive but it means nothing if the local folks do not experience any benefit from their new electric company, right? But MORE Power is different. Here are some of the benefits that Iloilo consumers have experienced.
System loss decreased.
Since it started operating in Iloilo in 2020, the system loss generated has decreased from a staggering 30% to just merely 5.5%. This means a greatly reduced electric bill because whatever system loss incurred by the company is divided and shouldered by the consumers (check your bill).
Lesser occurrence of unscheduled brownouts.
Apparently, these “unscheduled power interruptions” can be corrected. MORE Power achieved this through system rehabilitations and other modern strategies.
MORE Power has employed a 24/7 helpline that answers all calls and chats regarding consumer concerns. The reports are then echoed to response teams already prepositioned in the field for faster turn-around time. Through this efficient system, the response time to consumers’ electricity problems has been accelerated.
Efficient application for new accounts.
A big chunk of the system loss can be attributed to informal settlers who illegally tap electricity just because they cannot have a legal connection. Since they do not own the property (land) that they are living in, they cannot be given a legal connection. Their solution is to “tap” from sources public sources but their illegal use of electricity is not entirely free. That is called “system loss” and is added to the bill of consumers who have legal accounts with the company.
MORE Power has corrected this by making the process of application and connection simplified. It has also established a program for informal settlers in order to have their own account with the company.
Cheaper Electricity = Lower Electric Bills
Perhaps the most appreciated benefit or effect that consumers felt with MORE Power is the reduction of their monthly bills.
Who doesn’t love cheaper electricity? It can get so frustrating when you try very much to manage your electricity use in order to lower your electric bill and still get billed an exorbitant amount at the end of the month. The savings can still be used for so many things or added to the family budget for the needs of the family.
How Can MORE Power Provide Lower Rates?
MORE Power has been efficiently sourcing for renewable energy suppliers worldwide, which enables them to buy cheaper power.
The company 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).
Buying from cheaper renewable energy sources plus lower system loss means Lower Average Rates for the consumers. That is why Iloilo City has been enjoying lower electricity bills but with more stable supply for the last three years now.
Cheaper Source + Low System Loss = Lower Electricity Rates
The Situation of CENECO Right Now
CENECO has served us for the longest time. It is an old company, with almost 50% of its facilities, such as substations, already 30 years old. Bacolod City has undergone so many changes, including new infrastructure and township developments. Needless to say, without new equipment, CENECO can no longer meet the electricity demand of consumers.
Despite their intentions, the Energy Regulatory Commission (ERC) has not approved CENECO’s application for Capital Expenditures (CAPEX) since 2011.
Moreover, there is no longer enough funding for the repair and purchase of modern facilities, which is why there are frequent unscheduled brownouts and power fluctuations. CENECO has already also incurred a debt of more than PhP 600 million pesos in internal borrowings and from banks.
High Rates, Bad Service
CENECO is reporting a monthly system loss of 11%, which is above the 8.25% allowable cap of the ERC. This means that it is losing almost PhP 20 million pesos per month, which is then added to the consumers’ monthly bill.
It becomes very frustrating for consumers because no matter how they complain, CENECO can only do so much. It has become a vicious cycle.
What Will Happen in the Primelectric and CENECO JVA?
If CENECO enters into a joint venture company with Primelectric and becomes NEPC (NEGROS Power), these scenarios will happen:
Primelectric/NEPC (Negros Power) will bring in PhP 1.7 billion pesos in cash as payment for 70% of the value of CENECO’s distribution assets.
As a result, CENECO can pay its debts, return bill deposits to consumers, as well as provide separation and retirement pay to its employees.
The remaining cash can be returned to our member-consumers as patronage refunds.
CENECO’s franchise is expiring in 2030, which means that the market for a new player will be open. The Joint Venture Company will be able to apply for a new franchise to Congress for the next 25 years with new infrastructure already in place.
Qualified CENECO employees will be given priority to work in the new Joint Venture Company.
To jumpstart operations, 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.
The Joint Company to be established will contract new power supplies through fair negotiations and the Competitive Selection Process (CSP) or bidding. Renewable energy will be prioritized. The cheapest supplier wins. Bottomline, the consumer wins.
Bottomline, the consumer wins. System loss and a drop in electricity prices will be significant.
Efficient 24/7 customer support.
The service will become consumer-friendly and there will be someone to answer calls and respond immediately at any time.
When the dividends of Primeelectric/NEPC and CENECO are divided, 30% will go to CENECO. This means that CENECO will give dividends to its true member-consumer-owners.
For the Progress of Bacolod and Her People
NEGROS Power (the new Primelectric and CENECO JVA) commits to drastically lowering the incidence of unscheduled brownouts. They will also work on electrification, especially at the barangay levels. This will make work efficient and improve the lives of consumers. Moreover, this will surely protect electrical appliances that are adversely affected by power surges.
A more reliable and sufficient power supply will mean that more businesses will enter Central Negros Occidental. This means more choices as well as more jobs for the locals and taxes for the government.
Our pockets will also be happier because savings on electric bills means an addition to our family budget!