By Mae Singuay
The National Electrification Administration (NEA) has granted consent to the joint venture agreement (JVA) between the Central Negros Electric Cooperative (Ceneco) and the Negros Electric and Power Corporation (NEPC), with a condition for Ceneco to settle its outstanding loans and obligations.
In a memorandum dated November 13, NEA administrator Antonio Mariano Almeda said Ceneco must submit a full accounting of the settlement of its obligations and the net cash amount after the implementation of the JVA.
It also includes all outstanding loans and obligations, as well as the value of the assets funded or sourced from grants, subsidies or other assistance from NEA.
“The settlement by Ceneco of all of its outstanding loans and obligations with all other creditors who hold liens on its properties and the removal of such liens,” the memorandum read.
Almeda directed Ceneco to identify their assets and submit their current valuation as appraised.
“Upon receipt of the valuation, the NEA shall then endorse the matter to the Office of the Solicitor General or Department of Justice for appropriate action,” Almeda said.
Ceneco is directed to preserve its net cash and should only utilize it for NEA’s approval, Almeda said.
Department of Energy’s Department Circular 2013-07-0015 Section 18 said that Ceneco’s assets funded or sourced from grants, subsidies or other assistance from NEA, will not form part of the resets to be sold to NEPC.
Almeda added that Ceneco must also submit its nominated representatives and appropriate shares to the NEPC board.
Ceneco is also directed to settle pertinent separation pay and retirement benefits under applicable laws and collective bargaining agreements for its employees who will be separated by virtue of the JVA implementation.
Almeda further directed Ceneco to ensure the provision of services for the member-consumer-owners (MCOs) until the JVA’s full implementation and the start of NEPC’s operations.
“NEPC must undertake that it shall fulfill the mandate for the full electrification of the franchise area of Ceneco which shall be funded by NEPC,” part of the conditions cited.
NEA reserves its right to recommend that this express stipulation be included in the franchise of NEPC.
Ceneco must also ensure that it has set aside adequate funds for the bill and meter deposits of its MCOs.
He added that there should be no disruption in services during the transition of operations.
The administrator said that if any of the conditions are not met, NEA’s consent to the JVA will be reconsidered.
Earlier this year, Ceneco queried NEA about a JVA proposal from Ignite Power and Energy Holdings, which was later substituted by the Primelectric Holdings Inc./NEPC.
NEA, in its reply letter dated April 14, advised Ceneco that the JVA was in essence a sale of the cooperative’s assets and it should comply with Presidential Decree 269, also known as the National Electrification Administration Decree.
The JVA was signed by Ceneco and NEPC in June of this year./MS, WDJ