A SCANNED COPY of the operating expenses of
Leyeco V from 2005 to 2009. NASECORE points out it is worth
scrutinizing. Noteworthy are the Employees Benefits. There is also the
advertising expense, the “miscellaneous”, and “uncollectible accounts”.
NASECORE said that electric utilities are mandated by law to be prudent
with its expenditures, following 3 tenets: Is it needed? Is it
recurring? And will it benefit the consumers?
Rodolfo “Butch” Celestial, regional coordinator of National Association of Electricity Consumers for Reforms, Inc. (Nasecore), said that if only Leyeco V consumers would care to scrutinize the coop’s petition to raise power rates by 77-centavos per kilowatt-hour for the next five years, some proposed expenditures are “flagrant” or immoral.
This was Celestial’s observation on Saturday before a forum of the Ormoc Chamber of Commerce and Industry, together with the Consumers Advocate Group, when he walked them through some items in the petition.
He said that the law on electric utilities requires that expenditures be prudent.
The law, he added, operates on three simple tenets: Is it needed? Is it recurring? And will it redound to the benefit of the consumers?
“Do you need a mini-Superdome?”, he asked. “Will you benefit from it?”, he added. “No”, the audience chorused.
“Do you think it can be finished with only P3-million? The cost of a residential house nowadays?”, he posed further.
The NASECORE official said he wonders how many more “flagrant” expenses will Leyeco V consumers discover on the 208-page Distribution Development Plan for 2011-2015.
He urged the audience to attend the December 2 “orientation” on the petition as ordered by ERC on Leyeco V, when it noticed that majority of the people who attended the hearing were coop employees and there were only three board directors around.
“It’s time you wake up”, he said, and “get involved”.
NASECORE acted as intervenor during the hearing on the petition last November 8, and succeeded in having it suspended after the hearing officer noted that even the proponents could not explain their brief well.
Over-collection of P250-million
He also made some startling revelations. He said that per their study of Leyeco V’s financial reports for a period of five years, they have good reason to believe that the coop has “over collected” from its consumers some P250-million over the years.
“Remember, the coop is only allowed to charge a fixed amount over its actual purchased power and its total operating expenses remains more or less the same”, he said. But over the years, he added, the power purchased has increased, meaning there has been an increase of revenue for Leyeco V vis a vis it’s usual, recurring operating expenses.
In businessman’s lingo, he said, this is called “increased profit” which is unconscionable because Leyeco V is supposed to be a non-stock, non-profit “cooperative”. “This is your money. They should be returning that to you. If not in cash, then in form of deductions from your bill.”, he said.
The NASECORE has already written the Energy Regulatory Commission about it and they are hoping for a positive feedback anytime. NASECORE is the same group that succeeded in making MERALCO refund its consumers an “over collection” of more than P800-million.
Five percent reinvestment fund
He also explained about the five percent “reinvestment fund”, a strictly regulated fund. He said this fund could only be used by submitting a development plan to the National Electrification Administration and have it approved.
Their queries show that Leyeco V has not touched this fund, which it could have used to improve its lines and service over the years without waiting to petition for an increase of 77-centavos to do a job that it could have done years ago.
A copy of the audited financial statement of Leyeco V obtained show that the so-called “reinvestment fund” of the Leyeco V has reached 290-million already.
This does not include a P51-million fund that was supposed to be “refunded” to consumers for their meter deposits which was proposed during the general assembly to be “donated” to the coop as “contribution in aid of construction”.
During that assembly, it was explained that if it would be forced that the cooperative be made to cough up P51-million, then it would have liquidity problems.
But NASECORE claims that the coop has been making a profit through the years. In 2010, it posted a net profit of 42-million before a depreciation of P11-million was deducted.
NASECORE also furnished the audience copies of the operating, maintenance and administrative expenses of the coop from 2005 to 2009. He said that if perused closely, there are items like roughly an average of P 1. 3 million for “information, instructional and advertising”; another P 1.3-million for “miscellaneous”; and “employees benefits” for 2009 is at P38-million already. There is also an average of P1-million a year for “representation and entertainment”.
He said these were items that were worth looking into. Again, he said, it should follow the 3 principles: Is it needed? Is it recurring? And will it redound to the consumers’ benefit?
Electric coop employees highly paid
Celestial said that consumers might be surprised to know that electric cooperative managers and employees are among the highest paid, with lots of perks and benefits.
Atty. Jerry Gwen Conde of Leyeco II in Tacloban, he said, receives a monthly salary of P95,000 plus perks. Concurrently the manager of Leyeco III in Tunga, he also gets another P40,000. “He is the only person I know who can work 200 percent”, Celestial joked.
He added that with this information, “are you not curious to know how much your manager is receiving?”
“How much do you think your previous manager get for his retirement?”, he added, because the manager of SAMELCO who just recently retired got P10-million.
The figure surprised Atty. Roy Bernard Fiel who whooped “Wow, mura man og GOCC!”.
CDA registration
The speaker, on the other hand, said that what was important was that Leyeco V consumers “start waking up” and “be vigilant”. He also explained their group is advocating for registration of the cooperatives with the Cooperative Development Authority (CDA).
This way, he said, people become the real owners of the electric utility and whatever profits the utility makes, it will be returned to them in patronage refunds and dividends as “owners” of the coop.
He debunked claims that cooperatives that opted to register with CDA have flopped. He said that in a future forum, he would bring over the manager of a successful CDA registered electric cooperative to speak before the chamber, including the APEC party-list congressman.
APEC, he said, was Leyeco V’s party list of choice in the past year but they junked it last 2010 because APEC advocated to be registered under CDA.
Meanwhile, Atty. Fiel said that the Ormoc Chamber would not oppose the petition for increase just for the sake of opposing. He said the chamber is willing to hear what Leyeco V plans to do with the increase it is asking, but he would also want honest answers to some questions that has formed in his mind.
Fiel is not new to opposing Leyeco V petitions for rate hikes. During his incumbency as president, he opposed a similar petition and was able to hold it off for around four years. Unfortunately, he was not able to pursue it because the chamber lacked funds. The hearings then were being held in Manila.
Celestial, however, said this is not true anymore. As long as the consumers write ERC to hold the hearings where the affected localities are, they come.
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