NAGA CITY (5 November) - THE NEW LEADERSHIP of the Camarines Sur II Electric Cooperative Inc. (CASURECO II) Board of Directors has vehemently opposed a Memorandum of Agreement (MOA) signed by City Mayor Jesse Robredo and the former CASURECO II board president, Msgr. Zosimo Ma. Sañado, granting some twenty-five percent (25%) discount on the monthly bills of the City streetlights, despite the existing outstanding arrears of some P 125-Million in unpaid power bills.
Newly elected CASURECO II Board president Perfecto Nixon C. Tabora said the City government is paying CASURECO II about P 1.6 - Million in electric bills on the streetlights monthly, with a 25% discount on the monthly billing which results to a significant monthly loss of P 400,000 to the electric-coop.
According to Tabora, the contract on the streetlights is retroactive and will be implemented immediately. He noted that such a contract is prejudicial to CASURECO II since the amount allotted for the discount granted to the City government would have to be shouldered by the electric cooperative and its members.
Meanwhile newly elected board director for CASURECO II Naga South district, Atty. Adan Botor, stated that Msgr. Sañado's contract entered with City Hall will become a precedent for other local government units to seek for a similar power bill discount.
Reportedly, local officials of the nearby town of Minalabac had already expressed their interest to demand for a similar discount after knowing of the said MOA with the City government.
In a letter sent by Atty. Zenaida G. Cruz-Ducut, chairperson and CEO of the Energy Regulatory Commission (ERC), concerning the CASURECO II inquiry on the granting of discounts and preferential rates, the Commission replied that under ERC Resolution no. 23, the granting of preferential rates by electric-coops "is a management prerogative."
Nonetheless, any reduction of revenues on the part of the Distribution Utilities "must not be passed-on to their customers," the ERC pointed out.
The ERC also said that electric-coops are using the cash-flow methodology as a non-stock and non-profit organization. CASURECO II's approved rates will only yield revenues that are enough to answer for its expenses.
"Once it grants discounts to customers, it stands to lose a part of said revenues," the ERC letter stated.
Based on documents provided by the new board leaders, the MOA entered by Msgr. Sañado and Mayor Robredo was dated Oct. 26, 2009.
However, a copy of the board resolution "on the matter of the City streetlights, authorizing the former board president Msgr. Sañado, to sign a MOA with City Hall," was dated Oct. 27, 2009, under Board Resolution No. 2009-169.
Tabora revealed that the MOA was a "mid-night contract" concluded with City Hall before the CASURECO II General Assembly last Oct. 31. Attended by some 1,539 coop-members, the General Assembly also led to the election of the new set of officers of the electric-coop board of directors.