LEYTE-V Electric Cooperative Inc. (Leyeco V) might reduce the 7719¢ rate increase it is seeking to finance its proposed Capital Expenditures (Capex) following its meeting with banks last Dec. 13. The meeting was made to seek the most advantageous funding scheme for the Capex worth P1,045,162,099.
Representatives of four commercial banks attended the meeting namely Metrobank, Land Bank, Development Bank of the Phils. and Rizal Commercial Banking Corp. Leyeco V Finance Service Department Manager Jannie Ann J. Dayandayan said their proposed 7719¢ rate increase was based on 10% interest rate payable in five years regularly offered by banks.
At the meeting however, the banks said it would be advisable for Leyeco V to avail of a long term loan instead of a commodity loan for a Capex this big. As such, they are willing to extend less than 10% interest and stretch the repayment period up to 10-12 years. Dayandayan’s department still has to compute how much their new increase will be.
Meanwhile, Leyeco V GM Engr. Juanito E. Jorda reiterated the urgency to implement their five-year Capex program during a public hearing conducted by the Sangguniang Panlungsod last Dec. 21. He explained that the annual Capex they used to make allowed them only to catch up on their short-term needs facility and equipment-wise. The most expensive Capex Leyeco V has implemented so far is P198 million in 2004, part of which was spent to install a 20MVA substation at their main office in Simangan, this city.
Leyeco V came up with a five-year Capex this time not only being a requirement of the National Electrification Administration but also because of capacity buildup which threatens to overload their transformers. At present, Engr. Jorda said they can’t keep up with the energy requirements of their more than 100,000 consumers.
Dayandayan also reiterated that the internally-generated Reinvestment Fund for Sustainable Capital Expenditures (RFSC) which finances their annual Capex is not enough to cover the P1 billion required by the five-year Capex. Leyeco V will only raise P198,615,950.92 RFSC for 2011-15.
Asked if Leyeco V was making a profit, Engr. Jorda clarified that electric coops (EC), being non-profit entities, are allowed only to make a margin. When he took over as GM in 2009, Leyeco V suffered a net loss which he turned around the next year by making a P41 million margin for the EC. Now that they are making a margin, he announced that Leyeco V will extend a P5,000 mortuary benefit to listed consumers beginning Jan. 1, 2012.
(West Leyte Weekly Express issue of Dec. 19-25, 2011)
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