Answers to Frequently Asked Questions about CENECO-Primelectric Joint Venture Agreement

The Joint Venture Agreement (JVA) between CENECO and Primelectric has been the subject of much discussion and debate in recent months. Some consumers have expressed concerns about the potential impact of the JVA on the price of electricity, the quality of service, and the ownership structure of CENECO.

In this article, we will address some of the most frequently asked questions about the CENECO-Primelectric JVA and why we need to vote YES. We will provide clear and concise answers based on the information available to the public.

What are the differences between the JVA of BACIWA-Prime Water and CENECO-Primelectric?

There are several key differences between the JVA of BACIWA-Prime Water and the CENECO-Primelectric JVA.

• Ownership: 
  • There is a common misconception among many Bacolod residents that Prime Water and Primelectric share an affiliation. However, it is essential to clarify that this assumption is entirely false. The fact is, there is no connection between the two companies whatsoever. To set the record straight, Prime Water is under the ownership of Manny Villar, while Primelectric belongs to Enrique Razon.
  • BACIWA is a government-owned and controlled corporation (GOCC), while CENECO is a private corporation. This means that the CENECO-Primelectric JVA does not require the National Electrification Administration’s (NEA) approval.

• Valuation: When Prime Water entered into a JVA with BACIWA, they did not value or pay for BACIWA’s facilities. In contrast, the CENECO-Primelectric JVA values CENECO’s distribution assets at 2.4 billion pesos. This means that Primelectric will be paying CENECO for the use of its facilities.
• Investment: When Prime Water entered a JVA with BACIWA, they did not commit to any immediate investment in the distribution system. In contrast, the CENECO-Primelectric JVA commits Primelectric to immediately invest 2 billion pesos in capital for distribution system rehabilitation, upgrading, and modernization.

What will happen to the price of electricity?

The price of electricity is likely to decrease under the CENECO-Primelectric JVA because Primelectric has a proven track record of reducing the cost of electricity in other areas where it operates.

For example, MORE Power-Iloilo, a subsidiary of Primelectric, has the lowest rates right now compared to the electric coops in Western Visayas. Their rate is P11.65/KwH, while CENECO’s is P12.78/KwH.

Does the Primelectric have VAT?

Yes, the Primelectric will have VAT. It is required by the Bureau of Internal Revenue (BIR). However, VAT in the Primelectric will be lower because most of the electricity they will source will be Renewable Energy, which is VAT-exempt.

Is CENECO being privatized or sold by Primelectric?

No, CENECO is not being privatized or sold by Primelectric. CENECO will remain a private corporation under the JVA. What Primelectric is buying is CENECO’s distribution assets so that they have the authority to improve these facilities.

Do consumers still have a voice in the Joint Venture Company?

Yes, consumers will still have a voice in the Joint Venture Company. CENECO will have three seats on the Board of Directors of the Primelectric-NEPC and one independent director who will represent the interests of consumers.

Will there be a penalty if I am late in paying?

Yes, there will be a penalty if you are late paying your electricity bill. The penalty fee is only 2% of the total overdue amount if you cannot pay after the 48-hour grace period. However, your electricity will not be cut off immediately. This is different from CENECO’s one-bill policy, where your electricity will be cut off immediately, and you will have to pay a 2% penalty before reconnecting.

What about the Brgy Electrification programs?

The Brgy Electrification programs will continue under the JVA. The National Government, not CENECO, funds the Brgy Electrification Program. So, the allocation of funds by the National Government will not stop, and the Primelectric-NEPC will implement it. In addition, NEPC has its fund for the electrification of all areas under its jurisdiction.

Are we the owners of CENECO right now?

No, we are not the owners of CENECO right now. We are only member-consumers. However, if the JVA is approved, CENECO can be converted into a true cooperative registered with the Cooperative Development Authority (CDA), and we will be given proof of ownership so that we can qualify to receive dividends from CENECO’s earnings.

Is there any reason why we should not support the JVA?

There is no reason why we should not support the JVA. The JVA will improve the quality of service, reduce the cost of electricity, and give us more say.

Let’s vote Yes to Primelectric-CENECO Joint Venture Agreement

I hope this answers your questions about the CENECO-Primelectric JVA. If you have any other questions, don’t hesitate to contact CENECO or Primelectric-NEPC.

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Yes to JVA: Why Bacolod needs Primelectric-NEPC (Negros Power)?