ERC orders Buseco to explain ‘other charges’

MALAYBALAY CITY (MindaNews/21 May) — The Energy Regulatory Commission has issued a show-cause order to Bukidnon Second Electric Cooperative (Buseco) on March 23 asking the power distribution firm to explain why they should not be charged administratively for allegedly imposing other charges, including reconnection fee, without prior approval from the ERC.

The commission ordered Buseco to submit an explanation under oath “why no administrative penalty should be imposed or criminal action be instituted against its Directors and Officers for imposing such charges.”

Buseco reportedly increased its reconnection fee beyond the approved unbundled rates as contained in the decision on December 29, 2003 in ERC Case No. 2001-929, the ERC noted.

From P40, Buseco has raised its reconnection fee to P625.34 and then to P943.77 since 2010. The ERC said these were not the approved amounts for “other charges.”

“This constitutes a clear violation of the aforementioned decision of the Commission particularly on Items I.C and II.B.5,” it added.

The order, signed by Francis Saturnino C. Juan, Executive Director III of ERC, was issued on March 23, 2011 in Pasig City.  A staff of the firm’s legal counsel told MindaNews they only received the order earlier this month.

Buseco denied having violated the approved “other charges”.

“BUSECO did not increase its Reconnection Fee of P40.00 which remains the same, what was recovered by BUSECO was merely the actual incidental costs and expenses necessary to effect the disconnection and reconnection,” the firm said in its response to ERC, a copy of which was furnished to MindaNews Friday.

“The Board did not defy nor violate the Order of this Honorable Commission by the passage of the policy,” it added.

It argued that the overriding objective of the firm is to avoid shouldering the actual costs of materials, labor and overhead which it could not recover through the rates, “and at the same time prevent the members-consumers from taking for granted the demand to pay their accounts on time due to the very low reconnection fee at the expense of the cooperative”.

The firm downplayed the ERC case as a demolition job.

“It is a smear campaign against BUSECO by some incumbent members of the Board and former member of the Board who will not stop at anything in order to oust the General Manager and wrest control of the cooperative..,” it added.

The firm alleged that their detractors “have forum shopped before the Regular Courts, the Media, the Roman Catholic Church, even the Congress of the Philippines, and now before this Honorable Commission”.

Buseco explained in a response signed by lawyer Eleuterio Diao IV that its board approved the policy for “non recurring charges” related to the disconnection and reconnection.

The firm explained that in order to break even and recover the actual cost of the disconnection and reconnection, they are collecting for items which have not been considered as part of the Distribution, Supply and Metering Charges (DSM) “but will necessary be incurred in effecting the disconnection and reconnection.”

Buseco maintained the P40 reconnection was “maintained and not touched”.

It said that since these activities were not included in the rate structure as non-recurring and possibly one-time charges only and not taken into account in determining the disconnection and reconnection costs, the Board deemed it proper to adopt a policy that will enable it to recover actual costs.

Buseco added that after the policy was implemented “there was a material decline of disconnections.”

It asked the ERC to withdraw its show-cause order for “being without factual and legal basis”

MindaNews contacted Buseco general manager Edgardo Masongsong and board president Charlie Castillanes for comments but their legal office instead sent a copy of their reply.

The violation constituted penalties.

In her letter on May 16, Malaybalay City councilor Perla Rubio urged the City Council through Councilor Jay Warren Pabillaran, chairman of the committee on public utilities for appropriate action in reference to the order letter of the ERC.

The council, however, decided to wait for the update on the compliance of BUSECO with such order and the action of ERC after the given period. (Walter I. Balane/MindaNews)