Zamboanga City Electric Cooperative, through investor-managers Crowninvestment Holdings Inc. and Desco Inc., agreed to pay an additional P150 million to Western Mindanao Power Corp. as a part of a new compromise agreement.
This is an extension of Zamcelco’s compromise agreement with WMPC to resolve a legal dispute lodged at the Energy Regulatory Commission. The first compromise agreement lapsed on July 3.
The parties held a hearing at the ERC on Wednesday where Zamcelco agreed to pay WMPC the P150 million upon signing of the new 90-day agreement next week.
Under the new compromise, Zamcelco will give WMPC a partial payment of P150 million and pay an additional P80 million in security deposit. In return, the power supplier will run its plant for 90 days.
“Of Crown-Desco’s P2.5 billion-peso capital infusion into Zamcelco, P370 million have already gone to WMPC,” said Zamcelco chief management officer Henry Virola.
“So far, we paid P370 million of the disputed amount of P447 million in payables that WMPC is demanding—on top of our overpayments,” Virola said.
The coop in February this year flagged overbillings from WMPC in the amount of P441 million from 2015 to 2018.
Zamcelco claimed that these overpayments covered the pending payables the coop incurred to the power supplier. Zamcelco said WMPC unilaterally cut its power supply to the cooperative.
Crown-Zamcelco filed a motion with the ERC in April for the refund of its overpayments.
The motion also requested for the withdrawal from and the ERC’s dismissal of the application for approval of Zamcelco’s power supply agreement with WMPC.
The motion stated that the overpayments were made as WMPC overbilled the coop for capacity recovery fees and operations and management.
It said the overpayments were done without basis as the PSA between Zamcelco and WMPC was not yet in effect. Alena Mae S. Flores
“WMPC charged Zamcelco for a fixed capacity of 50 megawatts when Zamcelco would not use over 25 MWs a month. Without an effective PSA, WMPC should have only charged the cooperative for actual nominated or utilized capacity,” Virola said.
“WMPC also uses diesel, so their power is actually the most expensive in Zamboanga City,” he said.
He said Zamcelco was still waiting for the ERC’s decision on the motion for a claim of refund and for the dismissal of the PSA.
“We want to make sure that Zamboangueños get their P441 million back,” Virola said.
Crown-Desco was awarded the investment-management contract for Zamcelco in September 2018. It began the management of the coop in January this year.