The Energy Regulatory Commission (ERC) found the Ilocos Norte Electric Cooperative (INEC) to have overcharged its consumers by P123 million from 1996 to November 2004, or since the implementation of the power purchased adjustments (PPA) until the unbundling of power charges.

Though the ERC has yet to formally issue the results of its investigation of the local power utility, the overcharging was confirmed by Ilocos Norte Governor Ferdinand R. Marcos Jr. and Sangguniang Panlalawigan (SP) member Mariano V. Marcos II.

During his press briefing on April 13, the governor announced that the ERC is still wrapping up its report on the investigation and he expects them to formalize the results soon.

Marcos added that a refund order to INEC would also be served to repay the local cooperative’s overcharging of its estimated 116,000 consumers.

Speedy investigation of INEC

According to the governor, the ERC had started investigation of all power distribution utilities’ book of accounts in the country when Republic Act 9136, or the Electric Power Industry Reform Act of 2001, was implemented.

ERC’s due diligence on INEC however was further speeded up after the provincial board passed a resolution asking the regulatory commission to step in and investigate INEC’s pricing scheme.

When Marcos said he spoke with ERC Chairman Rodolfo Albano, the investigation on INEC was already completed.

“They [ERC] have already been looking at all of the electric cooperatives to see. Nag due diligence na sila. So noong humingi tayo ng imbestigasyon, ginawa na nila pero ang effect ng [SP] resolution natin was nabilisan ang kanilang pag-imbestiga. By the time we spoke to their chairman, tapos na. We saw him last Saturday [April 9] and it was finished already (The ERC was already conducting due diligence on all power distribution utilities nation wide before we started our own investigation on INEC. So when we asked their help in the investigation via an SP resolution, the effect it had was that the investigation was speeded up. When we spoke with the ERC chairman on April 9, the investigation was already complete),” Marcos explained.

Marcos also added that the ERC order is now going through the rounds for the signatures of other ERC officials. The order, Marcos stressed, is for INEC to refund its consumers.

Marcos II condemns INEC officials

Marcos II, who initiated the investigation of INEC at the provincial board, condemned the local power cooperative for “deliberately” overcharging its consumers.

“For all these years, we had given our trust and confidence to INEC management only to find out that they overcharge us so deliberately. ‘Yan ang medyo nakakainis. Alam nila na dagdag pabigat ‘yan sa ating mga consumers pero itinuloy pa rin nila. So there must be a clamor for change [from member-consumers] kung ganon nga (That’s what’s very annoying. They know that it’s an added burden for the consumers but they went on with it just the same. If this is the case then the member-consumers must clamor for a change),” Marcos II said.

The neophyte provincial legislator stressed that possible actions against the INEC management would only commence once the formal refund order from the ERC is handed down.

Additional overcharging

Marcos II also said that aside from the INEC overcharge through the PPA, the INEC may have also overcharged its member-consumers when power rates were unbundled in November 2004.

According to Marcos II INEC is not applying the prompt payment discount it gets when it pays to the National Transmission Corporation (Transco) and the National Power Corporation (NPC).

Explaining that the generation rate is supposed to be neutral, Marcos II said INEC is actually earning from the prompt payment discount being given them as they do not apply the 3 percent prompt payment discount they are enjoying.

Instead of giving discounts to its member-consumers, the board member said INEC actually pads this to four percent when they put it on the electric bills of member-consumers.

Refund

Meanwhile, if and when the ERC hands down its order for INEC to refund its consumers, Governor Marcos explained that as per ERC rules, INEC would have to give the rebates to its consumers with the same time they have overcharged them.

As INEC has overcharged its consumers for a period of eight years, the refund would also have to last for eight years.

However Marcos said that they would ask for a shorter period of repayment time as he also clarified that they are not out to “kill INEC” which is why they are looking around for a more plausible solution for both the power cooperative and the member-consumers whom they overcharged.

For his part, Marcos II said INEC officials should also cut down on the perks they have given themselves so they could refund what they overcharged from their consumers.

Among the steps called for by Marcos II include the reduction of their “huge” salaries, the lessening of their benefits and the cutting down of the INEC board of directors travel allowance currently pegged at P12 million.

Marcos II also advised the INEC officials to refrain from purchasing multi-million luxury vehicles for their personal uses, this way they would have enough money to pay for what they owe as a result of their overcharging.

Imee calls for heads to roll in INEC

Representative Imee R. Marcos (2nd district, Ilocos Norte), who was also instrumental in the INEC probe said “heads must roll” for the member-consumers to restore their trust and confidence to the INEC management in view of this overcharging.

The lady solon also said the INEC’s repayment should also not last for eight years.

“It’s very apparent that there’s a problem in INEC. Ang issue ngayon na kinakailangan nating abangan kung magkakaroon ng repayment scheme, ako ayokong pumayag na eight years ang bayaran. Hindi naman yata tama ‘yun. Kung P123 million o P133 million man ang sabihin ng ERC na utang sa taumbayan, utang na loob huwag namang eight years ang bayaran (The issue that we have to watch out for now is whether there would be a repayment scheme, for me I’m not in favor of an eight year repayment period. Whether the ERC would rule that it’s P123 million or P133 million, the repayment period should not last for eight years),” Ms Marcos said.

The lady lawmaker also appealed to INEC officials to open their records and to immediately refund their member-consumers of what they have overcharged them.

She also clarified that she does not want to bankrupt INEC but just the same the INEC management responsible for this fiasco should cooperate and abide by the ruling.

She further emphasized that a full-blown audit should be conducted on the local power cooperative for the concerned people to know the true state of INEC’s financial health as well as their assets and liabilities.

INEC’s reply

As of presstime, INEC General Manager Romillas C. Pascual said the ERC order has not yet reached them.

He also called on the public not to be too judgmental of the INEC management in the face of their P123 million overcharging as he said their records are open to public scrutiny.

Leilanie G. Adriano