Groups demand over P7 billion refund from Visayan Electric

·2 min read

CIVIL society groups have demanded that Visayan Electric Company refund over P7 billion to its consumers within its franchise area in Metro Cebu.

The Freedom from Debt Coalition-Cebu, Philippine Movement for Climate Justice-Cebu and Sanlakas said in their press briefer that the refund they want from the power utility firm comes from what they call “illegal collections” of capital recovery fees by Visayan Electric for the operation of its power generator—the Cebu Private Power Corp. (CPPC).

Visayan Electric (previously known as Veco) has yet to issue a response to the groups’ demand.

Sanlakas secretary-general Aaron Pedrosa, a lawyer, said they based their accounting of P7 billion on Visayan Electric’s collection of capital recovery fees from 2013 to August 2021.

‘Illegal’ collection

Pedrosa said Visayan Electric “illegally” collected P67 million every month or P800 million every year for a period of nine years.

Capital recovery fees, he explained, can be taken as the fees paid for the construction of the plant, which is the CPPC.

“What is also anomalous about that transaction is that in 2013, the power supply agreement (PSA) between Veco and CPPC already expired or met its natural demise by virtue of the expiration of the 25-year term,” he said.

Expired

Pedrosa said Visayan Electric entered the PSA with CPPC in 1997 and by 2013, it had already expired.

“They have been collecting fees from electric consumers without the benefit of a PSA and that is something that is unheard of given that any collection, especially in relation to fees for power rates, should be with the approval or the authority of the Energy Regulatory Commission (ERC),” he said.

Examined records

Pedrosa said based on public records examined by the groups, they found out that Visayan Electric had no PSA. In the previous PSA, the collection of capital recovery fee was not included.

“So why are they collecting capital recovery fees in the amount of P67 million when there’s no provision in the old PSA, and the PSA, in fact, already expired?” he said.

The groups are also calling for the conduct of an audit on Visayan Electric’s accounts, an investigation by the ERC into the existing power contracts between the company and its affiliates (most, if not all, are coal plant companies) and the review of Visayan Electric’s congressional franchise.

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