Advancing CENECO: Conditional Approval Granted by NEA for Bacolod Power Modernization Agreement
The National Electrification Administration (NEA) has granted conditional consent to the Joint Venture Agreement (JVA) between the Central Negros Electric Cooperative (CENECO) and Primelectric Holdings Inc./Negros Electric Power Corp. (NEPC).
Lawyer Arnel Lapore, the acting general manager of CENECO, explained in an interview on Tuesday that the term “condition” pertains to specific requirements outlined by the NEA for the approval of the consent.
As per the JVA, the private entity will provide capital and financial resources to modernize and enhance power distribution in CENECO’s franchise area by establishing the joint venture company NEPC.
Lapore referred to the memorandum dated Nov. 13 issued by Administrator Antonio Mariano Almeda to CENECO, copies of which were disseminated to the local media on Monday night. The memorandum stated that the NEA “conditionally grants its consent to the JVA subject to the fulfillment of (nine) conditions.”
Two notable conditions include the settlement by CENECO of all outstanding loans and obligations with the NEA and other creditors who have liens on its properties, along with the submission of proof of settlement for such commitments.
Currently, CENECO owes approximately PHP 60 million to the NEA, encompassing accumulated loans extended for implementing the power utility’s projects over the years. Additionally, outstanding loans with creditor banks have reached approximately PHP 200 million.
In the memorandum, CENECO must pay separation pay and retirement benefits under applicable laws and collective bargaining agreements due to its employees. It must also ensure the allocation of sufficient funds for the bill and meter deposits of its member-consumer-owners (MCOs).
Another condition stipulates that assets of CENECO funded or sourced from grants, subsidies, or other assistance from the NEA shall not be part of the assets sold to Primelectric/NEPC.
NEA has instructed CENECO to submit nominated representatives to the NEPC board and facilitate granting a valid and effective legislative franchise to NEPC for the current CENECO franchise area.
Furthermore, NEA emphasized that Primelectric/NEPC must fulfill the mandate and fund the complete electrification of CENECO’s franchise area.
CENECO must submit a comprehensive account of the settlement of its obligations and the net cash amount it will have after the JVA implementation. This includes outstanding loans, obligations with NEA and other creditors, and the value of assets funded or sourced from grants, subsidies, or further assistance from NEA.
“CENECO is directed to preserve such net cash and shall only utilize the same with the approval of the NEA,” added the memorandum.
In the memorandum, Almeda also directed CENECO to ensure the provision of services to its MCOs until the full implementation of the JVA and the commencement of NEPC operations.
“The NEA chief emphasized that there should be no disruption in services during the transition of operations.”
CENECO’s coverage area encompasses the cities of Bacolod, Bago, Silay, and Talisay, as well as the towns of Don Salvador Benedicto and Murcia.
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