Central Negros Electric Cooperative and Primelectric Holdings Inc. (PHI) officials signed a historic joint venture agreement on Saturday, July 3, geared towards modernizing and improving power distribution services in the CENECO franchise area.
The JVA needs the ratification of CENECO member-consumers in a plebiscite to become final.
Negros Occidental Vice Governor Jeffrey Ferrer and Rep. Stephen Paduano (Abang Lingkod partylist), who witnessed the signing at Scarborough restaurant in Bacolod City, said they are confident the CENECO consumer-members will vote in favor of the JVA during the plebiscite scheduled June 24 and 25 and July 1 and 2.
The JVA was signed by CENECO president Jojit Yap and PHI president and chief executive officer Roel Z. Castro.
The JVA states that the joint venture company for purposes of facilitating PHI’s infusion of needed capital and financial resources into the CENECO distribution system shall be the Negros Electric and Power Corp. (NEPC), which is currently in the process of registration with the Securities and Exchange Commission.
The CENECO franchise area covers Bacolod, Silay, Talisay and Bago cities and the municipalities of Salvador Benedicto and Murcia in Negros Occidental.
Castro called the signing of the JVA “very historic” because it is geared towards the delivery better service to power consumers within the franchise area of CENECO.
Castro, in a meeting with barangay captains before the signing, said they will invest an initial P2 billion in the joint venture for technical and manpower improvement on top of paying the 70 percent value of CENECO’s distribution assets.
The NEPC will reduce the systems loss of CENECO that is at P20 million a month, lower unscheduled brownouts, provide consumer friendly services, and work to bring down power rates, he said.
CENECO acting general manager Arnel Lapore, who signed the JVA as a witness, said the cooperative has 210,000 member-consumers and they need the yes votes of 50 percent plus one in the plebiscite for the approval of the JVA.
Under the guidelines proxy voting will be allowed.
A notarized proxy form and copy of the identification card of the voter will be needed by the person who will act as the proxy voter, Lapore said.
There will be no limit to the number of persons the proxy voter can represent, he said.
CENECO will be posting the lists of voters and copies of the JVA in the barangays starting Monday, he said.
The JVA states that CENECO foresees fiscal challenges ahead due to its high systems’ losses and regulatory challenges that may threaten its long term financial viability and ability to expand and modernize the distribution system in its franchise area to meet the requirements of consumers.
CENECO is in dire need of immediate financing for the implementation of critical capital expenditure projects which are needed to lower its systems’ losses and improve the reliability of its system, it said.
PHI has signified its willingness to partner with CENECO through NEPC through the investment of needed financial resources and provision of technical expertise and experience required to expand and modernize the distribution system in its franchise area, the JVA said.
This will meet the exponential growth and rapidly increasing demand for power, and improve electricity distribution services to consumers in the CENECO franchise area, the JVA added.
PHI and NEPC are affiliates of MORE Electric and Power Corp., which is a private distribution utility in Iloilo with proven financial and technical capabilities in the modernization and operation of distribution systems, the JVA said.
NEPC will pay for 70 percent of CENECO’s distribution assets and the 30 percent balance will represent the capital contribution of CENECO to the corporation, the JVA added.
The Board of Directors of NEPC shall be composed of 11 directors with at least three independent directors, with PHI nominating six and two of the independent directors, and CENECO nominating two directors and one independent director.
Ferrer and Paduano said they are campaigning for the passage of the JVA because it will mean better power services for consumers.
He is confident the JVA will be approved by the CENECO member-consumers, Ferrer added.
Paduano said he is supporting the JVA because of MORE Power’s track record at improving power services in Iloilo
The CENECO situation is hopeless so how can its services improve without the JVA, Paduano said.
“This is all about better service, it is now or never”, Paduano said.*