The National Electrification Administration (NEA) has consented to the joint venture agreement between Central Negros Electric Cooperative (Ceneco) and Negros Electric and Power Corporation of businessman Enrique Razon’s Primelectric Holdings Inc.
Under the JVA, NEPC/Primelectric will buy 70 percent of Ceneco assets and will invest more than P2 billion to upgrade the cooperative’s facilities.
Ceneco serves the cities of Bacolod, Bago, Silay, and Talisay and the municipalities of Murcia and Don Salvador Benedicto in Negros Occidental.
In a memorandum dated November 13, 2023, NEA Administrator Antonio Mariano Almeda said the agency conditionally grants its consent to the JVA between CENECO and Primelectric/NEPC, subject to the fulfillment of the following conditions:
-The settlement by CENECO of all of its outstanding loans and obligations with the 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. CENECO is hereby DIRECTED to submit proof of such settlement of such obligations to the NEA as soon as such becomes available;
-Payment by CENECO of the pertinent separation pay and retirement benefits under applicable laws and collective bargaining agreements that will be due to its employees who will be separated by virtue of the implementation of the JVA. CENECO is hereby DIRECTED to submit proof of such payments as soon as such becomes available;
– CENECO MUST ENSURE that it has set aside adequate funds for the bill and meter deposits of its Member-Consumer-Owners;
– In accordance with Rule Ill, Section 18(b) of Department of Energy Department Circular 2013-07-0015, the assets of CENECO that were funded or sourced from grants, subsidies or other assistance from NEA shall not form part of the assets that shall be sold to Primelectric/NEPC. CENECO is hereby DIRECTED to identify such assets and submit their current valuation as appraised by a NEA-accredited appraisal service provider. Upon receipt of the valuation, the NEA shall then endorse the matter to Office of the Solicitor General or Department of Justice for appropriate action;
-The receipt by CENECO of its appropriate shares in NEPC. CENECO MUST SUBMIT to the NEA its nominated representatives to the Board of NEPC;
– The grant of a valid and effective legislative franchise to NEPC for the current franchise area of CENECO;
– Primelectric/NEPC must undertake that it shall fulfill the mandate for the full electrification of the franchise area of CENECO which shall be funded by Primelectric/NEPC. The NEA reserves its right to recommend that this express stipulation be included in the franchise of NEPC; and
– CENECO must submit a full accounting of the settlement of its obligations and the net cash amount it shall have after the implementation of the JVA, including all of its outstanding loans and obligations with NEA and all other creditors as well as the value of the assets funded or sourced from grants, subsidies or other assistance from NEA. CENECO is DIRECTED to preserve such net cash and shall only utilize the same with the approval of the NEA.
Should any of the foregoing conditions not be met to the satisfaction of the NEA, the NEA’s consent to the JVA shall be thereby reconsidered.
Ceneco is directed to ensure the provision of services to its MCOs up to the full implementation of the JVA and the start of operations of NEPC. There should be no disruption in services during the transition of operations.
Ceneco and NEPC sought NEA’s consent after 98,591 of 178,236 eligible consumers voted in favor of the JVA in a plebiscite early this year.
