Veco admits arresters were surplus

CEBU, Philippines - Officials of the Visayan Electric Company (Veco) admitted before the members of the Cebu City council that the lightning arresters used to protect transformers in Barangay Banilad were surplus when purchased in 2008.

Lyndon Jayme, the power firm’s assistant vice president for utility and economics, did not react to Councilor Nestor Archival’s theory that the reason why their transformers were hit by lighting last May was because of non-functional lightning arresters.

Lightning arresters are designed to safely channel a lightning strike to the ground without damaging equipment. Inside the porcelain housing of an arrester, are a series of spark gaps plus one or more silicon carbide blocks. These are typically located at the top of a distribution pole wherever a pole-top transformer, capacitor bank or other critical piece of equipment is located.

Jayme said their lightning arresters were already second hand when these were purchased from the National Grid Corporation of the Philippines five years ago.

“And because probably it’s not working well then the lightning goes and hit the transformers,” said Archival who is also an engineer.

Because of the damage, Veco was forced to purchase additional power at a higher price from a power plant in Lapu-Lapu City resulting in additional cost of P34.2 million for three months which the utility company wants to pass on to the consumers.

The City Council invited Veco officials during its regular session yesterday to explain their intention to pass on to the consumers the P34.2 million. Should the Energy Regulatory Commission approved Veco’s petition, the consumers will pay an additional five to six centavos for every kilowatt-hour of power consumption.

“Sulod ra sa tulo ka buwan ang ipatuman namo nga increase, gamay ra g’yud na kaayo,” said Jayme.

Retired police officer Flaviano Sanson appeared before the City Council yesterday and asked Veco officials to refrain from passing it on to consumers.

“Have mercy on us,” Sanson told Jayme. The City Council designated Councilors Roberto Cabarrubias and Archival to represent the city in the ERC hearing in Manila to protect the interest of the city constituents.

“Kanang ten pesos nga increase sa konsumo sa koryente bug-at na kaayo na sa ubang tawo,” said Councilor Alvin Dizon.

The Freedom From Debt Coalition-Cebu Chapter has opposed Veco’s petition before the ERC.

FDC-Cebu chapter president Michael Enriquez cited several grounds in opposing the petition.

According to the group, the repair and reinstallation of the transformer could not qualify as capital expenditures project but as maintenance and operating expenses wherein the cost should be shouldered by VECO and must not be recovered from or passed on to the consumers;

VECO could recover the costs for the repair and installation of the said transformer from its fire insurance company or VECO shall bear the loss, damage or deterioration; And lastly, the cost of the repair and installation could not be included as forming part of VECO’s Regulatory Asset Base for the next Performance Base Regulations regulatory period.

It can be recalled that the 100 MVA transformer located inside the vicinity of the National Grid Power Corporation in Banilad, Cebu City was damaged when hit by a lighting last May 27, 2012.

As a result, five substations (Cabancalan, Banilad, Waterfront, Ayala and Camputhaw), which are all major load centers in the central area of VECO’s franchise, were affected.

Sebastian Lacson, VECO senior vice president and chief operating officer in a press conference the other day, said that the petition was only to recognize the additional capital expenditure with no cost consequence for the repair and reinstallation of the said transformer.

VECO is currently doing repairs on the damaged transformer, which is expected to be back on-line this coming September. – (FREEMAN)