Cebu biz leaders wary of Veco hike bid
CEBU business leaders voiced alarm over a proposed increase by the Visayan Electric Co. (Veco) to pay for the repair and reinstallation of one of its transformers damaged by lightning.
Prudencia Gesta, past president of the Cebu Chamber of Commerce and Industry, said the P34 million cost of repair and reinstallation of the transformer should be assumed by Veco instead as part of its operations.
“It should be amortized over a period instead of passing it on to the consumers…it is an additional burden to them which isn’t their fault,” he said.
A public hearing will be held tomorrow by the Cebu City Council on the Veco application for cost recovery filed with the Energy Regulatory Board.
Last March, Veco also started collecting an additional 19.38 centavos per kilowatt hour or P38.76 more added in the monthly bill of a household consuming 200 kwh.
The additional cost was included in the stranded contract charge filed by the Power Sector Assets and Liabilities Management Corp. (Psalm) and approved by the Energy Regulatory Commission (ERC) last April.
If the latest Veco application is approved, households would pay an additional P11.84 or P50.6 more for every 200 kwh of power used in their monthly bill.
Gesta and Cebu Business Club president Gordon Alan Joseph said another power cost increase by Veco can put at risk Cebu’s status as an investment destination.
“Power costs in the country are already expensive. Additional and unbudgeted costs like these will burden the large consumers who need power to transact their businesses,” he said.
The P34 million will cover the repair and re-installation of the transformer located at the National Grid Corporation’s Cebu sub-station.
Veco corporate communications manager Theresa Gonzales-Sederiosa said the transformer was damaged by lightning during a severe thunderstorm last May.
The transformer services Cabancalan, Banilad, Waterfront, Ayala and Camputhaw sub-stations which are all major load centers.
This caused massive power interruptions in the commercial and residential areas, including vital government installations.
If approved by the ERC, Sederiosa said the cost adjustment would mean an additional P0.0592 per kilowatt-hour (kWh) to Veco’s 34,000 customers for three months.
Sederiosa said if the transformer is not repaired or reinstalled, Veco will continue to incur rental costs of P1,217,034.00 every month and result in bigger additional charges on the customers.
“Under Article 10 of the Rules of Setting Distribution Wheeling Rates (RDWR) under Performance Based Regulation (PBR), a distribution utility is allowed to apply for approval of capital expenditures due to force majeure events such as what happened to Veco’s transformer,” she said.
For the first quarter this year, Veco services Liloan in the north down to San Fernando in the south with a peak average daily demand of 410 MW. /Aileen Garcia-Yap, Reporter
