Cebu City Hall, Veco sign deal on supply to South Road Properties power users
THE Cebu City Government and the Visayas Electric Company (Veco) yesterday signed a memorandum of agreement (MOA) for the utility firm to supply power to locators of the South Road Properties (SRP).
Mayor Tomas Osmeña said Veco will just charge the rate it collects throughout its franchise area while giving the city a P0.20 share per kilowatt hour.
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Osmeña, however, failed to mention that the MOA contained a provision where Veco can actually apply for an additional P0.20 as “access fee” from locators, which would be collected once approved by the “regulatory authority.”
It is the Energy Regulatory Commission (ERC) that approves all applications for rate adjustments and other charges by distribution utilities like Veco.
“The Access Fee shall appear as separate line item in the monthly statements accounts from the Distributor (Veco) to the Locators. Distributor shall exert reasonable efforts to obtain the approval from the relevant Regulatory Authority, when
applicable and necessary, for such application,” read Section 3.2, Article 3 (Rates and Billings) of the agreement.
And when open access and retail competition are implemented, Veco will continue collecting the access fee for the City, which “shall first cause each locator to execute an agreement for such continued charging and collection of the access fee.”
The same section also stated that if the “regulatory authority” orders Veco to stop collecting the access fee and return what was collected, the City Government should immediately return the total access fee it received.
Veco president Dennis Garcia and senior vice president and chief operating officer Jaime Jose Aboitiz signed the MOA for the utility company.
Section 3.1 also stated that Veco will charge its existing ERC-approved rates “in the meantime when electrical load of the
Ecozone (SRP) is not yet established.”
“When the electrical load of the Ecozone stabilizes, the Distributor shall apply with the Regulatory Authority, when applicable
and necessary, new rates specific for the Ecozone, and implement the same upon its approval,” it said.
The same portion of the agreement stipulates that an annual review of the electrical load of the SRP will be conducted to determine if there is a need for power rate adjustment, which the Veco should again apply for approval with the ERC.
The mayor said awarding Veco the right to provide power to SRP locators did not go through a bidding because they agreed that the property, though declared as an economic zone, is still covered by the utility company’s franchise.
Yesterday’s signing of the agreement signaled the availability of reliable power source for investors of the SRP, which became the topic of Osmeña and Gov. Gwendolyn Garcia’s renewed word war.
Yesterday, Osmeña again told the Capitol to just file a case if it saw something anomalous in the deal between the City and the Filinvest Land Inc. (FLI).
He said FLI officials felt insulted for being threatened with a congressional inquiry for entering into a joint venture agreement with the City.
“They have never felt being insulted like this. They asked what have they done on the SRP (to merit the criticism). I said nothing, just the vindictiveness of the governor. If they (Capitol officials) saw something illegal, why don’t they just file a case?” Osmeña told a press conference.
He, however, said enticing other investors to the SRP will not be as hard as that with FLI, which took him “four Sinulogs.”
The Sinulog is an annual event held every third Sunday of January in Cebu City.
Rep. Pablo John Garcia (Cebu, third district) has threatened to call a congressional inquiry on the FLI transaction, which involved the outright sale of 10 hectares and a joint venture with the City for 40 hectares.
Rep. Garcia said the deal is anomalous and disadvantageous to Cebuanos. Osmeña denied the accusation.
“I’m very proud of what I have done,” he said, reiterating that the Capitol is welcome to get a copy of the agreement and scrutinize it. (RHM)