Hotel told to pay P38.9M for pilfered power

CEBU, Philippines - The Energy Regulatory Commission has found Waterfront Cebu City Casino Hotel, Inc. liable for illegal use of electricity and ordered it to pay P38,916,808 to the Visayan Electric Company, Inc. However the amount is way below what VECO would have wanted to receive.

The ruling stemmed from ERC case number 2011-154 CC filed by Waterfront to contest VECO finding that it violated RA 7832 otherwise known as the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994".

The case was docketed on September 2, 2013 and the decision, which was published at the ERC website, was penned by ERC chairwoman Zenaida Cruz-Ducut and Commissioners Maria Teresa Castañeda, Jose Reyes, Alfredo Non and Gloria Victoria Yap-Taruc.

“Wherefore, premises considered, the Commission finds complainant to have consumed electricity that was not registered in the billing/kilowatthour meter due to an altered metering facility. Accordingly it is liable to pay respondent a differential billing in the amount of P38,916,808.00 surcharge equivalent to 25 percent of the next clean bill (February 26-March 26, 2011),” read the ERC decision dated July 8, 2013.

However, the amount granted by ERC is way below what VECO originally asked for which was P168,699,560.86 representing power consumed from August 2007 to February 2011 or an unregistered consumption of 27,469,951 kwh by the hotel.

In their decision, the ERC said that there is prima facie evidence of illegal use of electricity on the part of the hotel.           

“It is daylight clear that there is strong evidence of illegal use of electricity against complainant Waterfront,” the decision read.

During an inspection in Feb. 17, 2011, VECO representatives reported finding cut wires inside the condulet tee from the current transformers leading to the meter which affected the registration of the electricity consumption of Waterfront.

“Complainant’s attempt to dispel the existence of prima facie evidence by emphasizing that the substation was located in a conspicuous place and relatively difficult to reach the conduit tee containing the cut wires must fail,” the decision reads.

Waterfront asserted that a disgruntled, malicious or malcontent person could have been responsible for the tampering.

“Being in control of the said substation, Waterfront cannot feign ignorance of any changes which could have impacted on the instrument transformers and its accessories,” it read.

The decision added that the act of pilferage, as evidence by the presence of the cut wires on the condulet tee inside the premises, constitutes a prima facie case of illegal use, leading to unregistered consumption which can only be attributed to Waterfront.

“The act that Waterfront exercise tight control and supervision over the premises belies its argument that other persons may have been responsible for the pilferage. Besides, it has been likewise established that as a result of the unregistered consumption, Waterfront was indeed benefitted,” it also read.

ERC added that Waterfront is liable to pay differential billing pursuant to Section 6 of Republic Act 7832, which defines “differential billing” as the amount to be charged to the person concerned for the unbilled electricity.

However, the ERC said that only one third of Waterfront’s total consumption was unregistered, as two thirds of its consumption was already accounted for in its billing meter for every billing period.

“Hence, it should only pay the remaining unregistered consumption equivalent to one-third of its total consumption,” it added.

The decision stated that with the establishment of the actual unregistered consumption, VECO shall be allowed to recover a period of one year, which is the minimum recovery period allowed under the last paragraph of Section 6 by RA 7832.

The ERC added that VECO’s insistence on recovering the unregistered consumption for four years preceding discovery of the pilferage cannot be supported.

Records shows that while changes were made in the connections to the transformer throughout the four-year period, these inspections were not witnesses by an officer of the law and no findings of pilferage were reported during the said period.

            “Thus, the Commission will only allow the recovery of unregistered consumption equivalent to the minimum allowable recovery period of one year from date of discovery,” it stated.

The Commission added that it is incumbent upon VECO, as a public utility, to be vigilant in the conduct of its operation by performing routine inspections from time to time to ensure that its metering facilities are in good working condition and reflects the accurate consumption of the customer.

“Speciously, respondent has been remiss of its duty. It is worthwhile to note that had it not been for the discovery of the pilferage in 2011, respondent would not have reviewed the consumption of Waterfront since September 2007,” it said.

The decision further read that VECO’s failure to detect constitutes negligence which bars it from claiming differential billing as far back as four years prior to its discovery. —BRP (FREEMAN)