ERC clears VECO-Cebu Private Power deal

The Energy Regulatory Commission (ERC) said yesterday it sees no irregularity in the accord between the Visayan Electric Co. (VECO) and the Cebu Private Power Corp. (CPPC).

Earlier, Freedom from Debt Coalition (FDC) Cebu secretary general Lito Vasquez claimed that "the agreement between distributor VECO and producer CPPC failed to follow proper guidelines."

Vasquez further said that "the parties should have published their agreement first before asking for approval, as stipulated in the implementing rules and regulations of the Electric Power Industry Reform Act." If these provisions are not followed, Vasquez added, "the ERC has no right to hear the matter."

ERC chairman Rodolfo B. Albano Jr., however, asserted that the agreement between VECO and CPPC is bilateral and private between the two parties, hence no publication is required.

"What is required by law is the publication of an impending application with the ERC on matters, as in this case, rate adjustment petition, which the parties did comply. Therefore, the commission sees no violation of the IRR as claimed by FDC," Albano said.

Albano noted that a joint petition has been filed by the two parties for the ERC to approve their Interim Agreement.

"The ERC shall conduct a formal hearing on the petition, giving proper notices to all parties concerned, and thereafter, shall decide the case based on the evidence presented by all parties. The July 23, 2004 initial hearing is clearly an exercise of our regulatory function in compliance with the mandates of EPIRA," the ERC chief said.

VECO and CPPC filed the petition in compliance with the ERC’s decision enjoining them to address the problem of CPPC’s non-recovery of the true cost of generating power by negotiating and agreeing to a reasonable solution to their dispute.