Mayor Maria Isabelle Climaco-Salazar of Zamboanga City has ordered the Crown Investment Holdings Inc. (CIHI), the investment management contractor of the Zamboanga City Electric Cooperative (Zamcelco) to stabilize electricity.In a letter dated April 1 to lawyer Joseph Omar Castillo, CIHI president, a copy of which was obtained by TIMES, Climaco-Salazar said she was requesting the CIHI “for your commitment to pay WMPC, or hasten the provision of other sources for the soonest time possible, and find immediate solution to end the rotational blackouts.”
TIMES tried also to contact both companies, but CIHI officials did not comment on the story.
Officials of the WMPC said they have brought the issue before the regulatory agencies, particularly the Energy Regulatory Commission.
Based on the information from the Department of Energy over the weekend, Secretary Alfonso G. Cusi also ordered Administrator Edgardo B. Masongsong of the National Electrification Administration to mediate between the two companies for the settlement of the issue.
However, no settlement was arrived at last week as CIHI has accused WMPC, although it has yet to file a case on the issue before the regulators, of overcharging.
Climaco-Salazar said the issue on whether there was legal basis to withhold the payment of its obligation to WMPC, CIHI must be able to provide the needed power as “our people cannot suffer further.”
“We have been paying for our monthly bills and we see no reason why we are made to suffer the consequences of the electric cooperative’s refusal to pay WMPC,” she added.
She pointed out that “the stakes are too high” if the city, considered the business hub of Western Mindanao and host of the Western Mindanao Command, “if power outages will continue.”
In a press statement released April 3, the Alsons Power Corp., mother company of WMPC, said the power generator “is ready to immediately resume operations providing stable and reliable electric power to the consumers of Zamboanga City as it has for the past 20 years as soon as Crown / Zamcelco meets its legal and contractual obligations to pay WMPC for electric power delivered, provided that Crown/Zamcelco undertake the following steps as mandated by both the PSA (power supply agreement) and the law.
It claimed that the problem started when CIHI assumed the operations of Zamcelco in January as the winner of the IMC.
“Shortly after taking formal management of Zamcelco, Crown made the arbitrary decision to withhold payment on ₱ 460 million of Zamcelco’ s debt to WMPC equivalent to four months of electric power already supplied to Zamcelco from October 2018 to January 2019,” it added.
It pointed out that the IMC operator made the arbitrary move “despite the fact that the PSA mandates that any and all disputes related to payments to WMPC be submitted to the ERC for dispute resolution and that these must be paid in full while awaiting the outcome of the dispute resolution. Crown is thus in direct and willful defiance of the contractual and legal process for dispute resolution.”
“We are left to wonder what has become of the more that ₱ 460 million paid by consumers and not used to pay the producer of the power – WMPC,” the Alcantara company said as the company is providing the Zamcelco franchise area with about 50 megawatts, or half its capacity.
It added that just a month after CIHI took over the operations of Zamcelco, the city has started having power outages of as long as six hours.
CIHI took over the operations of Zamcelco last year as the cooperative was saddled with about P2.1 billion in debts, parts of its debts to suppliers like WMPC.
In her letter, Climaco-Salazar welcomed the commitment of CIHI to invest about P2.5 billion for the operations of the cooperative, but added that should immediately address the problem.
The takeover of the CIHI of the Zamcelco was not without controversy as a consumer group, the National Association of Electricity Consumers for Reforms (Nasecore) Zamboanga, filed a complaint against the board of directors of the cooperative for granting the IMC to CIHI.
In its complaint before the NEA in October, the consumer group claimed the bidding process was illegal and that certain issues like financial capability and technical knowhow in running a distribution company were not addressed during the process.