PECO says refund cannot be used in takeover bid

A TOP official of Panay Electric Co. (PECO) said refunds to consumers brought about by differences in power rates more than 10 years ago is not a reason for a corporate takeover of the distribution utility.

Mikel Afzelius, PECO corporate communications officer, said the P638-million (not P631 million) refund to consumers was for the generation charge or payments to their power supplier which is Panay Power Corp. (PPC) from February 1996 to July 2005.

Afzelius said the refund was triggered by subsidies to the National Power Corp. (Napocor) which lowered power rates beyond the viable price or “true cost of power” charged by suppliers to distribution utilities.

At that time, Afzelius said PPC was owned by Mirant Philippines Corp.

The Energy Regulatory Commission (ERC) then directed PECO to renegotiate its contract with PPC to keep up with lower power rates.

“Mirant sued the ERC but lost their case. It was then that ERC ordered a refund which we have been implementing since 2010 at P0.1595 per consumer every month,” Afzelius said.

Citing their data, Afzelius said the remaining refundable amount is P124 million as of September 2017. They expect to complete the refund in less than two years or even less.

“As a matter of fact, PECO is just a middleman here. The refund is for the generation charge, it’s not a penalty on PECO,” he added.

Afzelius also pointed out that PECO worked to spare Iloilo City consumers from additional charges for subsidies to the debt-saddled Napocor.

“PECO wrote the Power Sector Assets and Liabilities Management (PSALM) Corporation asking not to charge our consumers for power subsidies that was never availed by Iloilo City. Which is why there is a refund also. It was a proactive move by PECO in order to avert a rate increase and have a rate reduction instead in generation charges,” he added.

The refund issue is being used by a group of consumers to stage a “corporate raid” of PECO.

The group seeks to convert the refundable amount to company stocks which will allow the more or less 60,000 consumers to partly own the distribution utility.

Afzelius said the refund cannot be converted into company stocks “because it is for the generation charges.”

“We are just collectors in this situation. And the prevailing trend nowadays is that cooperatives are being gobbled by private outfits due to financial woes,” he added.

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