‘Overcharging’ power cooperatives

BEHIND THE SCENES
Alfred P. Dizon

BAGUIO CITY -- There is now a growing clamor among consumers of the Benguet Electric Coop. for the power firm to bare to the public its financial status following allegations of graft and corruption allegedly by management.

This was a sentiment of those who attended a recent city council hearing here to determine how to start an electric cooperative exclusively for Baguio without Beneco following persistent complaints of mismanagement like questionable acquisition of materials and properties like the lot worth millions of pesos at South Drive.

According to proponents like former provincial board member Bial Palaez, member consumers would have more control of a separate power cooperative if Beneco would be allowed to operate only in Benguet.

Martin Manodon of the Cooperative Development Agency agreed with Pelaez saying it would even be better if the new coop would be registered under the CDA as member consumers would have more benefits like dividends.
***
Beneco power consumers have long been complaining of not getting dividends or rebates from the power firm despite the fact that its operations have been lucrative over the years.

Consumers said the coop had been raking in profits worth millions of pesos but where the money went is still a question as the financial status of Beneco had not been sufficiently by management during its annual general assemblies.

We are not saying the present management of Beneco is engaged in hanky panky regarding funds of the cooperative as complainants have not gone far enough in filing charges for their grievances. After all, everybody should be presumed innocent unless proven otherwise.

Anyhow, Beneco consumers or “members” are not alone in their predicament as the management of most power firms under the Energy Regulatory Commission nationwide have been the object of complaints of consumers for alleged graft and corruption, mismanagement among others.
***
Just last week, a consumers’ group in Angeles City in Central Luzon urged the ERC to look into its claim that tens of thousands of electric consumers in the city have been overcharged by the Angeles Electric Co. (AEC) by as much as P528.9 million since 2005.

In a letter addressed to the ERC commissioners, Pete Ilagan, president of the National Association of Electricity Consumers for Reforms Inc. (Nasecor), presented a study by his group indicating that AEC allegedly overcharged consumers by P108.9 million in 2005, P54.8 million in 2006, P160.1 million in 2007, and P205 million in 2008.

“We find this over-collection alarming because we take this as an abuse of market power when AEC decided to deliberately keep to itself these over-collections instead of disclosing these by way of a petition to reduce its current rates,” Ilagan said.
***
Copies of the Nasecor letter were furnished Energy Secretary Jose Rene Almendras and the heads of the Senate and House committees on energy.

The AEC is owned by relatives of former Angeles mayor Francisco Nepomuceno, who is a member of the Nationalist People’s Coalition (NPC), the same party to which ERC chairperson Zenaida Ducut belonged to when she was congresswoman of Pampanga’s second district.

Ducut is a known ally of former President, now Pampanga Rep. Gloria Macapagal-Arroyo who appointed her to the post.

Ilagan said, “Had the ERC done its primary duty of reviewing the annual revenues it granted the AEC, it would have easily discovered these over-collections which Nasecor, on its own initiative, has discovered.”
***
His letter presented a table that showed AEC’s yearly total revenues, cost of power, actual distribution revenues, approved unbundled revenues, and amount of overcharging.
From 2005 to 2008, Ilagan said AEC had allegedly overcharged consumers in the amount of P528,977,139.

“To determine if AEC was getting its ERC-approved annual revenue requirement, Nasecor studied AEC’s 2006 to 2009 annual reports and compared its ERC reports, and compared its ERC-approved annual revenue requirements against its actual annual revenues,” Ilagan said in his letter.
***
He said the ERC “blatantly failed to closely monitor and review the operations of AEC” to also find out the electric firm’s “systems loss percentage which should be reflected if the utility is operating efficiently or not.”

“We urge the ERC to immediately conduct a regulatory audit of AEC and reduce its rates and stop over-collection,” Ilagan said. He also asked that AEC be made to refund consumers for the overcharges.
***
The AEC dismissed as “absurd” the allegation of the consumer group that it had overcharged its customers by P528.9 million from 2005 to 2008.

In a statement, Myra Rivera, head of the AEC customer service department, said, “While the unbundled rates of AEC, under Energy Regulatory Commission Case No. 2001-894, were approved in 2004, the implementation was deferred until July 2008 pending the resolution of a motion for reconsideration that was filed by the utility with the ERC.”

“Our distribution rates were never changed during the said period,” Rivera said. “In fact, prior to the 2008 implementation of its unbundled rates, AEC distribution rates never increased for 12 years.”

She added that AEC “has remained under the return-on-rate basis (RORB) methodology (from) 1996 until 2008.” But the Nasecor under Ilagan is unconvinced and want a thorough investigation on the matter.

Had the Beneco been overcharging consumers like the claims of the Angeles power firm? Next week, we will delve more on Beneco regarding related concerns like those raised in the Baguio City council hearing.