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By Francis Allan L. Angelo

ILOILO Electric Cooperative (Ileco 3) board president Mateo Baldoza, a former court judge, has no credibility, according to Iloilo Gov. Niel D. Tupas Sr.

This was Tupas’ reaction to Baldoza’s admission that the governor gave him an envelope with cash inside to favor independent power producer, Applied Research Technologies Phils. Inc., (Artech).

The alleged bribery, Baldoza told the National Electrification Administration investigating committee, happened April 17 during a meeting with Artech officials at Tupas’ mansion in Jaro, Iloilo City.

Tupas said in an interview with Bombo Radyo that Baldoza has no credibility because he kept changing his statements.

“At first he claimed that I gave him money then denied it. Now, he is saying that I did it. He always changes his story. He has no more credibility,” Tupas said.

The governor said Baldoza is the only person claiming that there was bribery in the Ileco 3-Artech deal while the other directors have nothing to say.

Tupas said Baldoza is being used by persons who want to besmirch his name and reputation as the 2010 election period nears.

“The election fever is here and these are just efforts by some groups to malign me. I pity Baldoza,” he said.

Tupas had admitted summoning Ileco 3 and Artech officials to a meeting in his house to discuss the looming power crisis in the cooperative’s franchise area.

But the governor denied handing out money to the Ileco 3 directors.

By Francis Allan L. Angelo

THE National Electrification Administration (NEA) continues to oversee the operations of Iloilo Electric Cooperative (Ileco) 3 despite the reported pressures from a politician to reinstate the board of directors to their full functions.

In a phone interview, Ed Adlao, NEA project supervisor tasked to administer Ileco 3 management, said he continues to discharge his functions until the NEA Administration Committee (AdCom) has concluded its probe on the alleged bribery of the cooperative’s board of directors.

NEA “deactivated” the Ileco 3 board headed by retired judge Mateo Baldoza when the latter alleged that he received a total of P150,000 cash from Iloilo Gov. Niel Tupas Sr. and officials of Applied Research Technologies Phils., Inc. (Artech).

The alleged bribe was meant to convince Ileco 3 directors to approve and sign a 25-year power supply agreement with Artech using diesel and biomass power plants.

NEA has recommended the rescission of the PSA and the conduct of a formal investigation on the alleged bribery.

With the NEA takeover of Ileco 3, the board of directors was reduced to an “advisory council” and was stripped of any power to approve or sign documents relative to Ileco 3 operations and policies.

The takeover is also meant to prevent the directors from influencing the investigation or tampering with documents needed in the AdCom probe.

“I was designated here to cool things down and pave the way for the investigation on the issues at hand,” Adlao said.

Reports surfaced yesterday that Rep. Niel Tupas Jr. (5th district, Iloilo) is pressuring NEA to restore the Ileco board to their normal status. 

Rep. Tupas is the son of Gov. Tupas.

Adlao said he did not receive any call from Tupas or any politician to pressure him to reinstall the board.

Adlao said he was supposed to act as overseer for three months since July “but the AdCom has yet to finish the investigation so I am still the project supervisor.”

“The directors themselves asked if the takeover will end because it’s already three months since we took over. Until the AdCom concludes the investigation, we will continue to oversee Ileco 3,” Adlao said.

Adlao said the AdCom has received the position papers of the complainants and the Ileco 3 board of directors.

“The AdCom has scheduled a public hearing in the coming days as part of their investigation,” Adlao added.

By Tara Yap

A LAWYER of the provincial government represented the board of directors of Iloilo Electric Cooperative (Ileco) 3 who are under investigation for the alleged bribery in a power supply agreement (PSA) with an independent power producer (IPP).

Atty. Joseph Anthony Lutero of the Provincial Legal Office represented Ileco 3 directors Achilles Pama, Joy Fuentes, Azur Salcedo, Vincent Espinosa and Emmanuel Pacardo during the hearing conducted by the National Electrification Administration (NEA) Thursday in Sara, Iloilo.

The directors are under investigation after Ileco 3 board president Mateo Baldoza revealed that he received P150,000 from Iloilo Gov. Niel Tupas and Applied Research Technologies Philippines Inc. (Artech) on two separate occasions.

Artech offered a 25-year PSA to Ileco 3 using a diesel-fired and biomass power plant. But technical managers of Ileco 3 claimed that the firm’s price is higher compared to other IPPs.

Lutero said there is nothing wrong with his appearance at the NEA Administration Committee hearing in behalf of the Ileco 3 directors.

“I don’t see any conflict of interest as we are still allowed to pursue our private practice,” Lutero said.

He added he appeared in the hearing on his private capacity, not as a capitol lawyer.

Lutero also assailed the complaint filed by Ileco 3 consumers against the board with NEA.

“It’s clear that the complainants didn’t understand what they were filing. They are emphasizing on the alleged bribery, but they did not focus on the contract to find out if it’s fair, just and reasonable,” he said.

He added the complainants’ issues on the price has no basis for comparison as it is not possible to compare diesel, biomass and coal with each other as these are different sources of power.

“To my mind, the truth is important. We all want to find out if the BoD acted lawfully,” he added.

In his fact-finding report, Atty. Omar Mayo, NEA legal department chief, said the PSA between Ileco 3 and Applied Research Technologies Phils., Inc. is “grossly disadvantageous and prejudicial to the interests of the cooperative and its member-consumers.”

Mayo said there was “undue haste, aggravated by bribery, in the signing of the said PSA, totally disregarding the findings of the very own technical personnel of Ileco 3.”

The NEA Administration Committee has directed the Ileco 3 directors to submit their position paper on the alleged bribery on or before September 12.

By Francis Allan L. Angelo

MEMBERS of the Iloilo Electric Cooperative (Ileco) 3 board of directors have until next month to answer allegations that they were bribed to approve a 25-year power supply agreement (PSA) with an independent power producer (IPP).

The Administration Committee (AdCom) of the National Electrification Administration (NEA) gave the directors until September 12 to submit their position papers as regards the bribery yarn.

Atty. Xerxes D. Adzuara, NEA AdCom chair, set the deadline after the preliminary hearing conducted at Ileco 3 head office in Sara, Iloilo Thursday morning.

The hearing began around 9am until past 10am and was attended by the Ileco 3 board headed by former Judge Mateo Baldoza, Rene Arandilla, Emmanuel Pacardo, Azur Salcedo, Achilles Pama and Vincent Francis Espinosa.

The directors were aided by their legal counsels Edison Belloga and Joseph Anthony Lutero.

Instead of a full blown hearing, the directors asked the AdCom that they will just submit their position papers.

Adzuara said they will make their recommendation to NEA Administrator Editha Bueno a month after the Ileco 3 directors submitted their position papers.

“If they don’t submit their position papers, this case will be submitted for decision to the NEA board meeting,” he added.

The NEA investigated the Ileco 3 board due to the complaints filed by two consumers following Baldoza’s exposé that he received P150,000 from Iloilo Gov. Niel Tupas Sr. and officials of Applied Research Technologies Philippines, Inc. (Artech).

The money, Baldoza said in his interview with Aksyon Radyo last May 5, was meant to facilitate the approval of the PSA with Artech which NEA recommended to be rescinded due to alleged onerous provisions.

 

SOMEONE?

But in his sworn affidavit which he made available yesterday, Baldoza pulled back his punches.

Baldoza said that he received from “someone” last April 17 an envelope containing P75,000 during a meeting with Artech officials at the house of Gov. Tupas in Jaro, Iloilo City.

Baldoza said that after eating at Tupas’s house, he was called inside the living room where “someone” thrust the envelope in his hand.

In his May 5 interview, the former judge said Tupas handed him the money. But he changed his tune in another interview May 6 saying a female Artech employee gave him the money at Tupas’s house.

He again hinted that the governor gave him the cash-filled envelope when he faced the probe conducted by the National Bureau of Investigation (NBI).

In an interview with Aksyon Radyo yesterday, Baldoza said he revealed the persons behind the alleged bribery to the NBI. He will also detail what happened at the governor’s house in his position paper to the NEA.

Aside from the April 17 meeting in Tupas’s house, Baldoza also claimed that he received another P75,000 from an Artech employee during their special board meeting in Iloilo City last April 21.

By Francis Allan L. Angelo

LOCAL government units and consumers of Iloilo Electric Cooperative (Ileco) 3 will continue to push for the ouster of the cooperative’s board of directors amidst allegations of bribery in the power supply agreement (PSA) it signed with an independent power producer.

This, even as the National Electrification Administration (NEA) is set to conduct a preliminary investigation on the bribery, according to Presidential Assistant for Western Visayas Raul Banias.

Banias said he received information from Metro Manila that members of the NEA administrative will arrive over the weekend or next week to start the preliminary probe on the Ileco 3 board.

NEA officials did not respond to queries to verify the schedule of the preliminary investigation.

The investigation is in keeping with the recommendations of NEA Legal Department chief Omar Mayo to investigate the board for allegedly receiving money from Applied Research Technologies Philippines Incorporated (Artech) in exchange for the approval of the 25-year PSA.

Mayo, who headed the NEA fact-finding team that looked into the deal, also recommended the rescission of the agreement for its onerous provisions.

Banias said they are also moving for the ouster of the Ileco 3 board and the eventual junking of the PSA.

Banias said the consumers of Ileco 3 and local government units within the cooperative’s area are supportive of the move.

While they respect the NEA probe, Banias said “the resignation of the entire board is the most honorable thing the directors could do.”

“Instead of waiting for any humiliation, they might as well quit their posts,” he added.

The alleged bribery was exposed when Ileco 3 board president Mateo Baldoza confirmed in an interview with Aksyon Radyo last May 5 that he received P150,000 from Iloilo Gov. Niel Tupas and Artech officials last July 17 and 21.

Baldoza said he received P75,000 from Tupas during a meeting with Artech officials in the governor’s house in Jaro, Iloilo City. Another P75,000 was handed to Baldoza by a female Artech employee during their special board meeting in a hotel in Iloilo City.

But Tupas and Artech President Reynaldo Uy had denied Baldoza’s allegations.

The NEA, upon recommendation of the fact-finding team, had “deactivated” the Ileco 3 board by assigning project supervisor Eduardo Adlao pending the investigation on the PSA.

By Francis Allan L. Angelo

THE National Electrification Administration (NEA) ordered the board of directors of Iloilo Electric Cooperative (Ileco 3) to justify why they should not be preventively suspended.

The NEA Administrative Committee issued the directive to the Ileco 3 board in a show cause order issued Friday.

The Ileco 3 board headed by former Regional Trial Court judge Mateo Baldoza is under investigation for the alleged bribery in the power supply agreement between the cooperative and Applied Research Technologies Philippines Inc. (Artech).

Last week, NEA gave the Ileco 3 board 10 days to explain the alleged bribery unearthed by the fact-finding team led by Atty. Omar Mayo of the NEA Legal Department.

The fact-finding team recommended the preventive suspension of the board of directors pending the formal investigation on the bribery issue.

NEA had deactivated the board and assigned Eddie Adlao as project supervisor to oversee Ileco 3 operations while the probe is ongoing.

Baldoza revealed in an interview with Aksyon Radyo last May 5 that he received P75,000 from Gov. Niel Tupas Sr. during a meeting with Artech officials April 17 at the governor’s house.

Baldoza also claimed receiving another P75,000 from an Artech employee after the approval and signing of the PSA April 21 in a hotel in Iloilo City.

Tupas had denied bribing the Ileco 3 board even as he defended the power supply deal as necessary to ensure ample electricity in the 5th district and portions of the 4th district.

The NEA fact-finding team found out that the PSA was over-contracted and will burden Ileco 3 consumers in the next 25 years.

The NEA investigation was triggered by complaints from two Ileco 3 consumers and the Ileco 3 management team.

Baldoza said he will stand by his claims as regards the alleged bribery when he submits his explanation to NEA.

Francis Allan L. Angelo

THE National Electrification Administration (NEA) has virtually stripped the board of directors of Ileco 3 of all the powers to run the cooperative.

Effective yesterday, Danny Sedoyo of the NEA Institutional Department and Eddie Adlao of the Management Accounts Group took over the board’s functions in Ileco 3.

Sedoyo and Adlao were designated as project supervisors of Ileco 3 following allegations of bribery in the power supply agreement (PSA) between the cooperative and an independent power producer.

NEA Administrator Edita Bueno, through the two supervisors, also designated Engr. Antonio Lazarraga as OIC-general manager of the cooperative.

Lazarraga also heads Ileco 3’s Technical Services Department.

Sedoyo and Adlao reported to Ileco 3 office in Sara, Iloilo yesterday morning and met the management team.

The supervisors were designated to oversee Ileco 3 operations upon recommendation of NEA Legal Department chief Omar Mayo. 

Mayo headed the NEA fact-finding team which initially probed the alleged bribery in the 25-year PSA between Ileco 3 and Applied Research Technologies Phils., Inc (ARTECH).

NEA Deputy Administrator Edgardo Piamonte said the two supervisors will handle Ileco 3 operations, particularly disbursement of funds and signing of contracts.

“They will act overseers of the cooperative while we investigate other issues such as the power supply deal. Every transaction of the cooperative must pass scrutiny of NEA through the supervisors,” Mr. Piamonte said.

Starting Thursday, only Adlao and Lazarraga can sign checks and disburse Ileco 3 funds. The board of directors will only act advisory board and will have no power to decide on the cooperative’s affairs.

In an interview with Aksyon Radyo, Lazarraga said it will be business as usual at Ileco 3 and there will be no movement of personnel for the meantime.

Mayo said in his report dated June 5, 2009 that there was “undue haste, aggravated by bribery, in the signing of the said PSA, totally disregarding the findings of the very own technical personnel of Ileco 3.”

The fact-finding team based its findings and recommendations on the statements of Mateo Baldoza, Ileco 3 board president, who alleged that he received P150,000 from a politician and ARTECH.

Baldoza, a retired trial court judge, said he first received P75,000 from Iloilo Gov. Niel Tupas on April 17, 2009 and another P75,000 from a female ARTECH employee on April 21, 2009.

Tupas and ARTECH President Reynaldo Uy denied the alleged bribery. Tupas said he only wanted to assure Ileco 3’s power supply as its supply contract with the National Power Corp. will expire next year.

Baldoza later modified his statement saying a female ARTECH worker gave him the money on April 17 at Tupas’ house.

The former judge lately went back to his initial statement after facing the National Bureau of Investigation which is also probing the alleged bribery.

Rene Arandilla, Ileco 3 director, claimed in his sworn affidavit that he saw and counted the money which Baldoza received last April 21, the day the supply deal was approved and signed.

Mayo also recommended the conduct of a formal investigation on the alleged bribery based on the notarized complaint of two Ileco 3 consumers, Gerardo P. Panes and Evelyn P. Peñaflor. 

He also recommended that the board of directors be preventively suspended pending the probe.

Piamonte said the NEA Administration Committee headed by Energy Sec. Angelo Reyes will convene to order the investigation by the NEA Legal Department.  

Mayo recommended the rescission of the Ileco 3-ARTECH power supply deal “for being grossly disadvantageous and prejudicial to its interests, as well as that of its consumers-members.”

Domingo Beltran, ARTECH vice president, said they will sue NEA and Ileco 3 if the power supply deal is rescinded.

Arandilla said they will follow NEA orders and wait for the agency’s action and moves on the alleged bribery.

“The supervisors will only be around for 100 days until the issue has been settled. We will follow whatever NEA wants,” Arandilla said.

By Francis Allan L. Angelo

DESPITE threats of suspension, the management team of Iloilo Electric Cooperative (Ileco 3) welcomes any move by the National Electrification Administration (NEA) to take over the cooperative.

Engr. Antonio Lazarraga, Ileco 3 Technical Services Division, said they have been asking NEA to take control of the cooperative since the bribery-tainted power supply agreement (PSA) with Applied Research Technologies Philippines Inc. (Artech) was exposed.

Lazarraga made the comparative report and simulation showing that Artech’s generation rate is higher compared to other independent power producers investing in Panay.

The management team headed by Dory Jane Canones, Finance Services Department manager, had asked the NEA last in a letter May 11 to investigate the PSA and alleged bribery of Ileco 3 directors.

The management team said they were embarrassed with the scandal rocking the cooperative.

“We will do our share in bringing justice to those that betrayed our member-consumers. We will bring to your attention the pronouncements and the calls of alls sectors in our communities. We will try to rebuild the trust and confidence of everyone that took years to earn. Please help us find justice for Ileco 3,” the team said.

The NEA fact-finding team headed by Legal Department head Omar Mayo recommended the rescission of the Ileco 3-Artech deal because of its “grossly disadvantageous” provisions.

The investigators also recommended the formal investigation and possible preventive suspension of Ileco 3 directors who voted in favor of the 25-year PSA.

Lazarraga said they would rather have the NEA take control of Ileco 3 to protect the interest of member-consumers who also happen to be their families.

He said while they have yet to receive a copy of the investigation report, they already expected NEA to make such recommendations.

“We will continue to work in the cooperative and our services will not be affected by the takeover which we think is the best thing to happen to us,” he added.

The management team will send a position letter to NEA to prove the alleged anomalies that attended the Ileco 3-Artech deal.

A NEA project supervisor is expected to arrive at Ileco 3 today to monitor the cooperative’s transactions. The assignment of the supervisor is also contained in the fact-finding report.

The board of directors launched a crackdown on Ileco 3 workers by imposing a 5-day suspension on a utility and three area managers.

Suspended were utility worker Juanito Buenafe; Cirilo Jerry Pacardo, area manager of Balasan sub-station; Lanie Jane Velasco Barotac Viejo sub-station manager; and Apolojandro Sicad, manager of Ileco 3 main office in Sara, Iloilo.

The four were suspended for purportedly disobeying orders from the Ileco 3 board.

But employees said it may have something to do with their refusal to dismantle streamers asking for the resignation of the Ileco 3 board.

The streamers have been hanging in Ileco 3 offices since the alleged bribery was exposed.

The four area managers also signed the May 11 letter of management team asking for NEA to investigate the Artech contract.

In their letter, the team hit the board of directors for their “vindictiveness, encroachment on otherwise purely management prerogatives and high-handed ways in dealing with coop employees who are perceived to be against them.”   

Even before the Ileco 3-Artech deal was exposed, there has been friction between the directors and the management team when former Ileco 3 General Manager Gil Altamira was forced to quit his job last year.

The Ileco 3 board, with clearance from NEA, formed a crisis management team (CMT) until a new general manager is appointed.

The CMT is alternately headed by three department managers on a monthly basis.

The board later appointed Aida Lamigo as permanent officer-in-charge of the cooperative which did not sit well with the management team.

NEA says Artech-Ileco 3 PSA disadvantageous to coop

By Francis Allan L. Angelo 

A FACT-finding team of the National Electrification Administration (NEA) recommended the scrapping of the power supply agreement (PSA) between Iloilo Electric Cooperative (Ileco 3) and an independent power producer.

The report of the probe team headed by Atty. Omar Mayo, NEA legal department chief, said the PSA between Ileco 3 and Applied Research Technologies Phils., Inc. is “grossly disadvantageous and prejudicial to the interests of the cooperative and its members-consumers.”

The team submitted its findings to NEA Administrator Edith Bueno June 5, a month after Ileco 3 board president Mateo Baldoza revealed to Joel Tormon of Aksyon Radyo that he received P75,000 from Gov. Niel Tupas Sr.

Baldoza said in the May 5 interview that Tupas gave him the money during a meeting with Artech officials at the governor’s house in Jaro, Iloilo City.

The NEA probers said there was “undue haste, aggravated by bribery, in the signing of the said PSA, totally disregarding the findings of the very own technical personnel of Ileco 3.”

The team recommended the following actions to NEA board of administrators:

–         assign a NEA project supervisor at Ileco 3 to monitor the operations and transactions in the cooperative;

–         the PSA, upon the initiative of Ileco 3, be rescinded for being grossly disadvantageous and prejudicial to its interests;

–         investigate the notarized letter-complaints of two Ileco 3 consumers for proper action by NEA including, but not limited to, the preventive suspension of the Board Directors who voted for the PSA, either by active participation or tacit consent.

Edgardo Piamonte, NEA deputy administrator, confirmed that the team has submitted its report to the board for its approval.

Piamonte said a project coordinator will arrive in Ileco 3 Wednesday next week to start monitoring the cooperative’s operation.

Bribery

The NEA probers also found that bribery may have took place prior to the signing of the contract.

The finding was based on the sworn affidavit of Ileco 3 director Rene Arandilla and Baldoza’s radio interview with Askyon Radyo.

The investigators said Arandilla’s affidavit is credible because he personally heard from Baldoza about the additional P75,000 from Artech after the signing of the contract April 21 in Iloilo City.

“Baldoza himself showed the envelope to Arandilla, who was asked by the former to count the contents thereof, amounting to P75,000. Stated differently, the portion of the affidavit on the ‘additional’ amount in the envelope was a product of the personal knowledge of Arandilla, and cannot be denominated as hearsay evidence. In point of fact, Arandilla – with the express consent of Baldoza, was even tasked to count the money inside the ‘additional’ envelope,” the report said.

While Baldoza changed his tune on who gave him money at Tupas’s house, his recantation “cannot obliterate the fact of bribery” in the deal.

“The ‘revision’ in the recantation of the Board President touches base only on the person who gave the money, as the latter pronouncements would tend to show that the same official/representative gave the first and second amounts. At bottom, whether it was the Governor or the Artech representative who gave him the first and the second envelopes is of no moment, as it refers only to the giver but does not, in any way, deny the act itself,” the report said.

Baldoza recently said he told the National Bureau of Investigation that Tupas handed him the money last April 17. 

No bidding; railroaded 

The NEA investigators said the Ileco 3 board failed to analyze the PSA that will bind Ileco 3 consumers to Artech in the next 25 years.

It was also noted that Artech was not among those IPPs which submitted bids to the consortium to supply power to seven electric cooperatives in Panay and Guimaras Islands.

“There was undue haste in entering into contract as it took only 16 days for the board to decide to ink the contract with Artech. When compared to the consortium, the period is very short, as it took them about four months to study and evaluate offers of the different IPPs. The duration of the contract is no less than 25 years, which would all the more necessitate the exercise of prudence to afford the members-consumers the best possible deal on the matter of electricity rates. Artech personnel furnished the members of the board copies of their proposed contract for study and evaluation on April 5, 2009 and was signed April 21, 2009,” the report said.

While the Ileco 3 board claimed that Artech presented its proposal during the board meeting March 18, “nothing can be found in the minutes of board meetings that a thorough and extensive deliberation/evaluation was ever conducted on an important issue, so as to warrant the signing of the contract.”

No contract review

The NEA probe team also scored the Ileco 3 board for failure to submit the contract to NEA for requisite review of its provisions.

The NEA report said this lack of NEA approval of the Ileco 3-Artech deal “raises the proverbial quizzical eyebrows, considering that a similar PSA was entered into by and between CAPELCO (Capiz Electric Cooperative) and the same IPP.”

“Why did Artech agree with CAPELCO to subject its PSA to contract review by NEA while totally shutting out NEA from reviewing its PSA with Ileco 3?” the NEA report said.

The investigators said NEA’s omission from the deal was “designed to ‘cut corners’ and expedite the signing of the contract, as referral of the PSA to NEA for review would further delay the signing and set back the timetable.”

By Francis Allan L. Angelo

 

SOME of the major protagonists in the alleged bribery of Iloilo Electric Cooperative (Ileco) 3 board of directors will not attend the public hearing initiated by the Sangguniang Panlalawigan in Sara, Iloilo today (May 19, 2009).

 

The probe, which was triggered by a privilege speech of 5th district Board Member Jett Rojas, is spearheaded by the committee on economic affairs and investments chaired by 3rd district BM Arthur Defensor Jr.

 

The investigation will focus on the alleged bribery of the Ileco board in exchange for the approval of a 25-year power supply agreement (PSA) with Applied Research Technologies Phils., Inc. (Artech).

 

Last May 5, former judge Mateo Baldoza claimed in an interview with Joel Tormon of Aksyon Radyo that Governor Niel Tupas gave him an envelope containing P75,000 during a meeting with Artech officials April 17 at Tupas’ house in MV Henchanova, Jaro, Iloilo City.

 

Another envelope containing P75,000 was also given to Baldoza by a female Artech employee April 21, the same day the board approved and signed the PSA.

 

Baldoza, however, later modified his statement saying it was not Tupas who gave him money during the April 17 meeting but a female Artech worker.

 

Baldoza and Tupas will not attend the SP hearing today “because of prior commitments”.

 

Tupas said he will send a letter to Defensor explaining why he cannot show up at the hearing.

 

Baldoza is said to be attending the wedding of his son in Cagayan de Oro City.

 

The committee also invited 5th district Rep. Niel “Jun-Jun” Tupas Jr. but the latter declined.

 

Mayor Raul Tupas of Barotac Viejo, which is under Ileco 3 franchise, will send a representative to the hearing.

 

Those who confirmed to attend the hearing are Presidential Adviser Raul Banias, Ileco 3 management team headed by Dory Joy Canones, Ileco 3 directors and 5th district mayors.

 

Engr. Reynaldo Uy, Artech president, will also attend.

 

Representatives of Global Business Power Corp. and Panay-Guimaras power consortium were also invited to the SP hearing.

 

Tupas had denied bribing the Ileco directors although he confirmed the meeting between the board and Artech at his house.

 

Iloilo provincial administrator Manuel Mejorada said Tupas had indeed arranged the meeting to expedite the deal between Ileco 3 and Artech to avert a looming power crisis.

 

Tupas said he favored the PSA because Ileco 3’s transition supply agreement with the National Power Corp. will expire in December 2010. The governor said he wants to address the looming power shortage in Ileco which covers the 5th district.

 

Uy also denied the alleged bribe saying he did not bring with him any female employee to the April 17 meeting at Tupas’ house.

 

Uy said their proposal to put up a 5-megawatt diesel-fired power plant and a 5-MW biomass power plant will solve the power crisis in Ileco 3 and provide livelihood to consumers.

 

The Artech official said his company will also construct a P30-million power substation to connect Ileco 3 to his plants.

 

Uy said his company does not engage in bribery even as he suspects that business and politics could be behind the issue.

By Francis Allan L. Angelo

 

THERE is no assurance that the biomass plant being proposed by Applied Research Technologies Phils., Inc. (Artech) can supply cheap and stable electricity to the consumers of Iloilo Electric Cooperative (Ileco) 3.

 

This is the assessment of Engr. Edgar Mana-ay, who has 30 years of experience in oil, power generation and mining industries, in an interview with The Daily Guardian on Air over Aksyon Radyo.

 

Citing previous media interviews of Artech president Reynaldo Uy, Mana-ay said the primary purpose of the power firm is to plant sweet sorghum which will be processed into alcohol and ethanol.

 

The Biofuels Law mandates that diesel and gasoline should be mixed with ethanol to reduce dependence on fossil fuels and help arrest climate change.

 

Mana-ay said the waste product from ethanol processing called silage, which is equivalent to the bagasse in sugar mills, will be used as feedstock for Artech’s 5-megawatt power plant.

 

“The biomass plant is actually a steam power plant. In the Artech system, sweet sorghum will be processed into ethanol. The silage from the sorghum will be burned to boil water in the caldera to produce steam. The steam will run the turbine which in turn produces electricity,” Mana-ay said.

 

But Mana-ay fears that Artech will use Ileco 3 as “guinea pig” because the sorghum-based biomass plant technology is not reliable and feasible.

 

“Nowhere in the world can we see of a plant similar to what Artech is proposing is used as baseload power plant. The technology of converting sorghum into alcohol and electricity is still in the research and pilot stage,” Mana-ay said.

 

Mana-ay said 1.5 kilograms of sorghum silage must be burned to produce one kilowatt of electricity.

 

“A 4MW power plant will need about 216 tons of silage everyday to operate. Considering that sorghum matures in 100 days, it is estimated that 5,000 hectares of land is required to support a 4MW power plant. Is that plantation achievable and possible and how sure are we that such an area can provide a year round steady supply of fuel to the power plant?” he added.

 

Mana-ay is also concerned with the environmental effects of the biomass plant because sorghum silages has 40 percent ash content.

 

“This means that 80 tons of ash from the plant must be disposed daily. Unlike in coal ash which is a very good material for hollow blocks, agricultural ash has no use expect to sour up the soil,” Mana-ay said.

 

Mana-ay said Artech should explain to the public the actual technology of its biomass plant so that Ileco 3 officials and consumers can study the advantages and disadvantages of the power supply agreement.

 

In an interview with Serbisyo Publiko hosted by Councilor Perla Zulueta yesterday, Uy said the sorghum plantation is a livelihood component of Artech’s 25-year power supply agreement (PSA) with Ileco 3.

 

Uy said the Ileco 3 board headed by former judge Mateo Baldoza had no objections to the PSA when he presented his proposal starting February 2009.

 

The Ileco 3-Artech deal is tainted with bribery after Baldoza claimed in an interview with Joel Tormon of Aksyon Radyo that Governor Niel Tupas Sr. gave him an envelope containing P75,000 cash while saying “Buligan ta lang sila (Let’s help them).”

 

The money was given during a meeting between the board and Artech officials at Tupas’ house in Jaro, Iloilo City April 17. Baldoza said the money might have something to do with Artech’s proposal.

 

Another P75,000 cash was given to Baldoza April 21, the day the board approved and signed the PSA, by a lady believed to be working for Artech.

 

Baldoza later modified his first statement saying a woman from Artech gave the money to him at Tupas’ house, not the governor himself.

 

Uy denied that his company gave money to Baldoza and other Ileco 3 board officials. He said his company does not practice bribery to corner deals.

 

Uy also said that other companies might be behind the issue against Artech’s deal with Ileco 3.

 

“I feel bad because my company was dragged in the fray,” he added.

By Francis Allan L. Angelo

 

ILOILO Governor Niel Tupas Sr. indeed arranged the meeting between the Iloilo Electric Cooperative (Ileco) 3 board of directors and officials of an independent power producer (IPP) at his house in Jaro, Iloilo City last April 17.

 

In an interview in the weekly cable TV program Serbisyo Publiko hosted by Councilor Perla Zulueta Sunday, provincial administrator Manuel Mejorada said Tupas initiated the meeting between the Ileco 3 board and Applied Research Technologies Phils., Inc. (Artech) to address the looming power crisis in Iloilo.

 

“It is the habit of Governor Tupas to expedite matters when things go slow. He was worried that by 2010, Ileco 3 will have no more power supply because its transition power contract with the National Power Corp. will expire December 2010,” Mejorada said.

 

Engr. Reynaldo Uy, Artech president, said Ileco 3 director Asur Salcedo invited him to meet the board headed by former judge Mateo Baldoza at Tupas’ house in MV Hechanova, Jaro last April 17.

 

Uy said the meeting was set after Tupas learned that the board has yet to act on Artech’s 25-year power supply agreement after three months.

 

“Governor Tupas asked the board about our deal and president Baldoza said the offer was good. The governor then said that we must settle the matter because he will be leaving for his office,” Uy said.

 

Uy said the board told him that they will meet April 21 to decide which IPP to choose.

 

The Artech official denied that money changed hands during the meeting at Tupas’ house and the April 21 meeting at Fine Rock Hotel in Iloilo City.

 

Uy’s denial contradicts the claims of Baldoza that he received money from Artech during the two meetings.

 

Baldoza initially implicated Tupas as the one who handed him the money. But he later modified that statement saying it was a female Artech employee who gave him an envelope containing P75,000 cash.

 

Baldoza said he wanted more time to study Artech’s offer because the comparative study of their Technical Support Department showed that the IPP’s generation rate of P8.per kilowatt-hour 56 is expensive compared to other power producers.

 

But Uy said their rates are lower compared to other IPPs that made offers to the Panay-Guimaras power consortium – P6.64 per kWh for the diesel plant and P5.90 per kWh for the biomass plant.

 

Artech will supply power to Ileco 3 from a diesel-fired power plant starting December 2010. Between 2010 and 2013, the firm will construct a 5-megawatt biomass plant which will operate as baseload power plant.

By Francis Allan L. Angelo

 

 

Banias said he will also file next week a complaint with the National Electrification Administration (NEA) asking the agency to investigate the Ileco 3 board and the 25-year power supply agreement with Applied Research Technologies Phils., Inc. (Artech).

 

He will also furnish the Energy Regulatory Commission and the Department of Energy copies of his letter complaint.

 

Banias said he is still awaiting the resolutions from the Sangguniang Bayan of seven towns under the Ileco 3 franchise.

 

“These resolutions opposing the deal with Artech and calling for the investigation on the Ileco 3 board will be attached to the letter that will be sent to NEA,” he added.

 

Aside from the resolutions, Banias said he will also attach the comparative study of Ileco 3’s Technical Services Department showing that Artech’s generation charge of P8.56 per kilowatt-hour is higher than the rates of other independent power producers (IPP).

 

Banias said he will tell President Gloria Arroyo about the bribery issue and power supply deal with Artech “to protect the interest of consumers which includes me.”

 

While he expected his detractors to link his actions to DMCI which is planning to put up a coal-fired power plant in his town Concepcion, Banias said he is concerned with the welfare of Ileco 3 consumers.

 

“The power supply agreement with Artech is over contracted. The present requirement of Ileco 3 is 4.8 to 5 million kilowatts while the contract says that Artech will produce 6 million kW. There is an excess capacity of some 1 million kW. Under the ‘take and pay’ clause of the contract, Ileco 3 consumers will pay for the electricity produced by Artech whether we consume it or not. We will shoulder millions of pesos per month if the contract pushes through,” Banias said.

 

But Artech president Reynaldo Uy said they will sell electricity to Ileco 3 at P6.50 per kWh using a diesel-fired power plant. But when the proposed biomass plant operates, the rate could go down to P5.90 per kWh.

 

The Ileco 3 management had sent a letter to NEA asking the agency to suspend and investigate board members who were present in the April 17 meeting at Governor Niel Tupas’ house in Jaro, Iloilo City where the alleged bribery happened.

 

In his first interview with Joel Tormon of Aksyon Radyo, Ileco 3 board president Mateo Baldoza said Tupas personally gave him an envelope containing P75,000 during the meeting with Artech president Uy and president for marketing and business development Domingo Beltran.

 

Baldoza said Tupas asked him to “help them” while handing the envelope. Another envelope laden with P75,000 was given the Baldoza during the April 21 meeting in Iloilo City where the board approved and signed the deal with Artech.

 

But in another interview, Baldoza changed his statement saying a female employee of Artech, not Tupas, gave the money to him.

 

Tupas also denied bribing Baldoza in his house saying he only facilitated the meeting to help ease the power crisis in northern Iloilo.

By Francis Allan L. Angelo

 

A MEMBER of Iloilo Electric Cooperative (Ileco-3) board of directors (BoD) confirmed the much-publicized bribery in the house of Governor Niel Tupas Sr. last April 17, 2009.

 

In his sworn affidavit dated May 13, 2009, Ileco 3 director Rene Arandilla said that on April 17, BoD president Mateo Baldoza told him that the board was summoned to a meeting with officials of Applied Research Technologies Phils., Inc. (Artech) in Tupas’ house at Brgy. MV Hechanova, Jaro, Iloilo City

 

“I called our board president through my cellphone and he confirmed the information and that he was about to go to the house of Governor Tupas in Iloilo City and I categorically told him that I am not going to the house of Governor Tupas for that meeting,” said Arandilla who represents the towns of Anilao and Banate to the Ileco 3 board.

 

After the meeting, Arandilla said Baldoza, a former court judge, told him that Tupas personally gave him P75,000 cash during the meeting.

 

Baldoza confirmed receiving money from Tupas in an interview with Joel Tormon of Aksyon Radyo-Iloilo last May 5.

 

The former judge said he received another envelope containing P75,000 from a female employee of Artech during their board meeting April 21, 2009 at Fine Rock Hotel in Iloilo City. The power supply deal with Artech was approved and inked on the same day.

 

Arandilla said that after the April 21 meeting, Baldoza showed him an envelope while saying “There is an ‘additional’.”

 

“I inquired what it was and he told me that it must be money given by a lady wearing black and out of curiosity and with his consent, I counted the money inside the envelope and determined to be containing P75,000 allegedly coming from Artech,” Arandilla said.

 

Arandilla said Baldoza told him to get P10,000 because he will give the rest of the money to the Church but the former refused. “Finally, he told me that only myself and his wife knew about this (money).”

 

The money is believed to be linked to the 25-year power supply agreement between Artech and Ileco 3. 

 

Arandilla’s statement corroborates the claim of Dr. Raul Banias, presidential assistant for Western Visayas, that Baldoza told him about the money Tupas gave the board president.

 

Banias said that even before the April 17 meeting, Baldoza confided to him that Tupas was pressuring the board to approve and sign the deal with Artech.

 

Banias said Baldoza volunteered the same information to other persons such as former board member Victorino “Dagul” Salcedo II and former Ileco 3 general manager Gil Altamira.

 

“These people confirmed that Judge Baldoza told them about the alleged bribe and pressures,” Banias said.

 

Baldoza, however, retracted his statement in another interview saying a lady from Artech and not Tupas gave the money to him at Tupas’ house.

 

Ileco 3 legal officer Edison Belloga had denied the alleged bribe in the deal with Artech.

 

Arandilla and Baldoza resisted the power supply agreement because Artech’s generation charge is the most expensive compared to other independent power producers (IPPs) that joined the bidding called by the Panay-Guimaras power consortium.

 

It was learned that Arandilla is a retired public school principal.

 

WHAT BRIBE?

 

In an interview with Febe Morales of Aksyon Radyo, Artech president Reynaldo Uy denied greasing the Ileco 3 board.

 

Uy said he met the Ileco 3 board at Tupas’ house last April 17 upon the invitation of director Asur Salcedo.

 

Uy said he has been presenting his company’s proposal to the Ileco 3 board since January 2009. During those presentations, the management team was also present and queried the executive about the deal.

 

Artech proposed to first construct a 6-megawatt diesel-fired power plant within 2010.

 

Once the diesel plant is completed, Artech will put up a 20MW biomass power plant which will be completed in 2010. The IPP will use sorghum as feedstock of the biomass plant.

 

Uy said he sensed that the management team was biased to other IPPs that will invest in Iloilo.

 

The Artech president said he laced the deal with a provision to build and turnover to Ileco 3 a P40-million power substation 25 years after the implementation of the supply agreement.

By Tara Yap

 

A MUNICIPAL councilor believes that the board of directors (BOD) of Iloilo Electric Cooperative (Ileco) are planning something drastic for the cooperative.

 

Ajuy municipal councilor Pepe Baterna disclosed that Ileco 3 BOD is eyeing for the conversion of Ileco 3 from an electric cooperative (EC) under the National Electrification Administration (NEA) to the Cooperative Development Authority (CDA).

 

Baterna said that consumers and stakeholders have to be wary of this proposal.

 

Presently, Ileco 3 is subject to NEA’s rules and regulations, especially in the appointment of a general manager and its decisions have to undergo proper review by NEA.

 

However, Baterna said that under CDA, member-owners are empowered through the BOD to hire and remove officers without any review from regulating authorities on new decisions and policies set by the BOD.

 

“This means the member-owners are very powerful.  They can hire or terminate employees without any hassle,” Baterna told The Daily Guardian.

 

Baterna warned that member-owners can manipulate as they are duly given more power than ever.

 

Baterna, on the other hand, did not dismiss the advantages of CDA registration.

 

Under NEA, Ileco 3 is presently a non-profit and non-stock organization.  But if it undergoes conversion, member-consumers who have paid a minimal fee and contributed to the share of the capital are duly recognized owners of Ileco 3.

 

Conversion to CDA will also pave way to tax exemptions and privileges for Ileco 3.

 

Other advantages of CDA conversion include member-owners having wider participation in decision making, sourcing of additional capital and equipment by Ileco 3 itself and without the consent of NEA, management is accountable to member-consumers and not only answerable to NEA, and provides patronage refund and interest on share capital granting there is net surplus.

 

“CDA conversion is very promising,” Baterna added.

 

Meanwhile, Baterna is calling all Ileco 3 consumers in Fifth District to unite against the alleged anomalous deal Ileco 3 entered with Applied Research Technologies Philippines Inc. (Artech).

FOR SALE A consumer holds placards denouncing the Ileco 3 board during an indignation rally in Sara, Iloilo Saturday. (Photo by Tara Yap)

FOR SALE A consumer holds placards denouncing the Ileco 3 board during an indignation rally in Sara, Iloilo Saturday. (Photo by Tara Yap)

By Francis Allan L. Angelo

 

THE National Electrification Administration (NEA) can boot out the entire board of directors of an electric cooperative (EC) if there is proof of their mismanagement and conduct unbecoming.

 

Engr. Wilfred Billena, Iloilo Electric Cooperative (Ileco) 1 general manager and NEA board member, said NEA’s power to supervise and control ECs is imbued in Presidential Decree No. 1645.

 

Section 10 of the decree empowers NEA “to issue orders, rules and regulations and motu-propio or upon petition of third parties, to conduct investigations, referenda and other similar actions in all matters affecting said electric cooperatives.”

 

If the electric cooperatives fail to comply with NEA edicts after due notice, NEA can “take preventive and/or disciplinary measures including suspension and/or removal and replacement of any or all of the members of the Board of Directors, officers or employees of the cooperative.”

 

In the case of Ileco 3 and its controversial 25-year power supply agreement with Applied Research Technologies Phils., Inc. (Artech), Billena said consumers should file a complaint with NEA.

 

“As soon as we receive the complaint, we will verify it and conduct an investigation to give due process to parties involved,” Billena said.

 

In a text message to The Daily Guardian, NEA Administrator Edita Bueno said they will address the Ileco 3-Artech deal if her office receives a complaint.

 

Ileco 3 board president Mateo Baldoza and member Rene Arandilla questioned the deal saying Artech’s generation charge of P8.56 per kilowatt-hour is expensive compared to the offers of other independent power producers (IPPs) in a bidding conducted by the Panay-Guimaras power consortium.

 

Artech’s offer is seen to jack up Ileco 3’s rate from P6 per kWh to P12 per kWh.

 

Artech did not join the consortium’s bidding and instead made an unsolicited offer to Ileco 3 to put up a diesel-fired power plant and a biomass plant.

 

Baldoza had alleged that he received P75,000 from Governor Niel Tupas Sr. during a meeting with Artech officials in the governor’s house in Jaro April 17.

 

Baldoza also received last April 21 another envelope from an Artech employee with the same amount of money during the Ileco 3 board special meeting in Iloilo City. The Artech deal was approved and signed during the same meeting.  

 

But Baldoza later changed his statement by denying that Tupas handed him the money at the latter’s mansion. He said a female employee of Artech gave the money to him.

 

Tupas had denied Baldoza’s allegations saying he only arranged for the meeting. The governor said he only wants to secure the power requirements of Ileco 3 by inviting more IPPs.

 

Billena said he found it irregular for Ileco 3 to accept Artech’s offer outside a competitive bidding process.

 

“Under the rules of the Energy Regulatory Commission (ERC), procurement of power should be done through competitive bidding unless there are no other choices. The contract between Ileco 3 and Artech will undergo ERC review and approval and I believe the commission will protect the consumers,” Billena said.

 

Billena said the technical services department of the cooperative must first examine the contract to find out if the analyses and assumptions are correct.

 

“The management side is very important in the deliberation of the contract because it will go over the contract on technical matters. The contract might result in oversupply which might burden the consumers,” Billena added.

 

Public hearings and consultations with stakeholders must also be conducted before the cooperative can enter into an agreement.

 

ERC Commissioner Rauf Tan earlier said distribution utilities and cooperatives are responsible for contracting enough and affordable electricity for their consumers.

 

A competitive process must be observed in tapping sources of power, Tan said in an interview with The Daily Guardian.

 

More than 1,000 Ileco 3 consumers trooped to the cooperative’s office in Sara, Iloilo Saturday to call for the revocation of the deal with Artech.

 

Ileco 3 covers the towns of Anilao and Banate in the 4th district and Barotac Viejo, San Rafael, Lemery, Ajuy, Concepcion, Sara, San Dionisio, Batad, Estancia, Balasan and Carles in the 5th district.

 

Dr. Raul Banias, presidential assistant for Western Visayas and former Concepcion mayor, said he will write NEA, ERC and the Department of Energy regarding the Ileco 3-Artech agreement.

 

The local government units under Ileco 3 will also pass their respective resolutions calling for the revocation of the deal.

 

“I am also a consumer and I will be affected if this agreement pushes through. I am disappointed with the Ileco 3 board for its act,” Banias said.

 

Atty. Edison Belloga, Ileco 3 legal counsel, defended the agreement saying only Artech can provide electricity after the EC’s power supply agreement with the National Power Corp. next year.

 

Belloga said Artech’s proposed biomass plant will benefit consumers as it will drive down prices of electricity. The proponent will also establish a sorghum plantation to sustain the plant’s fuel.

 

“The plantation will put to good use idle lands in the 5th district and provide employment to the consumers,” Belloga said.

By Francis Allan L. Angelo

 

GOVERNOR Niel Tupas Sr. was seething with anger when he heard the allegations that he bribed the Iloilo Electric Cooperative (Ileco) 3 board of directors to sign a power supply agreement with an independent power producer (IPP).

 

Tupas also hit former judge Mateo Baldoza, Ileco 3 board president, for implicating him the alleged bribery in the cooperative’s agreement with Applied Research Technologies Philippines, Inc., (Artech).

 

Baldoza had repeatedly said in a live interview with Joel Tormon of Aksyon Radyo that Tupas gave him an envelope containing P75,000 during a meeting with Artech top honchos April 17 in the governor’s house in Jaro.

 

Baldoza later contradicted himself saying a woman from Artech gave the envelope while he was in the sala of Tupas’ house.

 

Pagkabati ko sina gina-ugtum ko lang ang akon kaakig (I checked my anger when I heard the news) because I believe that the truth will come out. And the truth is that I did not give money to him (Baldoza),” Tupas said.

 

Tupas said it was only Baldoza who was claiming that he received money from Artech while the other board members denied being bribed.

 

“Of all the board members, he is the only one saying that he was bribed. Who will you believe then?

 

While he was responsible for the creation of Ileco 3, Tupas said he has no personal interest in the cooperative except to secure stable and cheap power supply for consumers.

 

“Next year we will suffer brownouts already so we need more plants. The more power plants we have, prices of electricity will be cheaper because of competition. Whoever can supply power to Ileco 3 is welcome. There are no favors, no relations and no money involved here,” Tupas said.

 

PROBE

 

During the regular session of the Sangguniang Panlalawigan Tuesday, 5th district Board Member Jett Rojas called for an investigation on the Ileco 3-Artech deal.

 

In a privilege speech, Rojas, who hails from Ajuy which is part of Ileco 3 franchise, said the deal is a big sellout of the consumers as it will tie them to high power rates offered by Artech.

 

The board member said Artech’s generation charge of P8.56 per kilowatt-hour is expensive for the consumers.

 

“This contract will result in 100% increase in electricity bills. If consumers are presently paying P100 per month, it will increase to P200 per month when the agreement takes effect,” Rojas said.

 

Vice Governor Rolex Suplico said Rojas’ measure was referred to the committee on economic enterprises and investments chaired by Board Member Arthur Defensor Jr.

 

Suplico said they will conduct an out-of-town session and committee hearing May 19 in Sara, Iloilo. The venue for the hearing and session could either be at the session hall of Sara municipal board or the Ileco-3 office.

 

Suplico said they are looking for the signed copy of the contract since all they have is a draft copy.

 

He cited Section 3 of the contract which requires approval of the Iloilo provincial government before the deal can be implemented.

 

“It is a standard practice that each party to an agreement should have signed copies of the contract to avoid alterations in the document. But Ileco 3 only has a draft copy,” Suplico said.

 

Suplico said the contract was silent on the feedstock of the biomass plant Artech is proposing to construct.

 

“What kind of biomass plant is that? What is the fuel? Grass, trees or what? If there will be a plantation for the feedstock, where it will be located? How big is the area?” he said.

 

Ileco 3 legal officer Edison Belloga said Artech will first construct a 6-megawatt diesel-fired power plant in 2010. Once the diesel plant is completed, Artech will put up a 20MW biomass power plant which will be completed also in 2010. The IPP will use sorghum as feedstock of the biomass plant.

 

CAUTION

 

In a statement, Iloilo provincial administrator Manuel “Boy” Mejorada urged the public to be more “discerning” over the Ileco 3-Artech power supply agreement.

 

Mejorada said the controversy is a “big demolition job” for political and business purposes.

 

“There are big forces behind this move, and it is obvious the targets are Governor (Niel) Tupas and the much-coveted power supply agreement with a big cooperative,” Mejorada said.

 

Mejorada said Rojas speech’s is part of a “grand scheme” to misinform the people about the transaction and portray Tupas as “having sold out the interests of his constituents” to Artech.

 

He said the offer of Artech is a two-step scheme in which the power company will build a diesel-fired plant to operate before December 2010 when the existing PSA of Ileco III with the National Power Corp. (Napocor) ends, and then shift to biomass technology two or three years later its plant for the purpose is completed.

 

“The P6.50 per kilowatt hour of generation cost applies only to the diesel-fired power supplied by Artech,” Mejorada said.

 

Once the biomass-fueled plant becomes operational, Artech will charge only P5.90 per kilowatt hour for the electricity it generates, he said.

 

He said the electric cooperative’s need to sign a PSA with a reliable supplier is “more urgent” because Napocor will stop its supply of power by December 2010, or about 19 months from now.

 

Mejorada said the “bidding” conducted by the consortium of electric cooperatives in Panay and Guimaras is not binding on them.

 

“The consortium is a loose aggrupation formed as a bargaining leverage in getting proposals from interested companies,” he said.

 

Mejorada added that the PSA is not even a perfected contract yet, as it will have to undergo scrutiny by the Energy Regulatory Commission (ERC).

 

He described the legislative investigation sought by Rojas as “a waste of time and energy.”

Ileco 3 consumers stage an indignation march and rally at the Sara office of Ileco 3. (Photos by Tara Yap)

Ileco 3 consumers stage an indignation march and rally at the Sara office of Ileco 3. (Photos by Tara Yap)

 

Presidential Assistant for Panay Raul Banias and former Sangguniang Panlalawigan member Victorino Salcedo question Baldoza who claimed he received money from Artech. Banias would later walk out from the dialogue.

Presidential Assistant for Panay Raul Banias and former Sangguniang Panlalawigan member Victorino Salcedo question Baldoza who claimed he received money from Artech. Banias would later walk out from the dialogue.

 

Former judge Mateo Baldoza

Former judge Mateo Baldoza

 

 

Banias confirms Baldoza told him about Artech bribe

 

By Francis Allan L. Angelo and Tara Yap

 

AS EARLY as Holy Week, Presidential Assistant for Western Visayas Raul Banias had already learned that the Iloilo Electric Cooperative (Ileco) 3 board of directors was being pressured to strike a deal with an independent power producer (IPP).

 

Banias said he first got wind of the controversial deal between Ileco 3 and Applied Research Technologies Phils., Inc. (Artech) from board president Mateo Baldoza. 

 

“During Holy Week, I received a text message from Judge Baldoza informing me that Governor Niel Tupas is calling the board to a meeting at the governor’s house. He also told me that they were being pressured to accept Artech’s proposal,” Banias said over cable TV program, Serbisyo Publiko hosted by Councilor Perla Zulueta Sunday morning.

 

Banias said Baldoza told him last May 1 about the meeting at Tupas’ house in Jaro, Iloilo City April 21 and the money Baldoza initially claimed to have received from the governor. Two Artech officials – president Reynaldo Uy and vice president Domingo Beltran – were present in the meeting.

 

The retired judge also recounted another envelope filled with cash was given to him last April 21 during a special board meeting in a hotel in Iloilo City.

 

Banias said Baldoza volunteered the same information to other officials and personalities in the 5th congressional district.

 

Last May 5, Baldoza told Aksyon Radyo anchorman Joel Tormon that Tupas gave him an envelope containing P75,000 while saying “Buligan ta lang sila (Let’s help them).”

 

Baldoza said the money may have something to do with the Artech deal which he questioned because of its exorbitant generation charge of P8.56 per kilowatt-hour.

 

But Baldoza contradicted himself in another interview saying a woman from Artech gave the money at Tupas’s house, not the governor.

 

Tupas also denied bribing Baldoza although he confirmed the meeting at his mansion. The governor said he favors the agreement with Artech because the IPP can provide power when Ileco 3’s power supply deal with the National Power Corp. expires next year.

 

Banias said he pities Baldoza, whom he described as an honest and forthright person.

 

“Judge Baldoza is a person of high integrity and probity. Maybe he was guilt-stricken reason why he volunteered the information to me, to other personalities and the media to assuage that guilt. I don’t know why he recanted his statement. If he changed his story, then his credibility is in question,” Banias added.

 

More than 1,000 consumers led by Banias, provincial Board Members Jett Rojas, former board member Victorino Salcedo II, Mayors Ermelita Salcedo of Sara, Elizabeth Salcedo of Concepcion and other local officials held an indignation rally at the Ileco 3 office in Sara while the board was in a meeting.

 

The protesters carried placards denouncing the power supply agreement with Artech and the alleged bribe given to Ileco 3 officials.

 

One placard asked: “Gov. Tupas ngaa ginbaligya mo kami? (Gov. Tupas why did you sell us)?” Another said: “Ileco 3 for sale P150,000 per director for inquiries just contact ARTECH.”

 

Buligi lang da sila ari ang P75,000,” said another placard.

 

The protesters also hanged a streamer at the gates of Ileco 3 compound in Brgy. Preciosa, Sara condemning the power supply agreement with Artech.

 

A dialogue was later held between the Ileco 3 board and local officials to discuss the issues.

 

Banias, Rojas and the mayors queried Baldoza on the alleged bribe but the latter stuck to his latest pronouncements that Tupas did not bribe him. He also said that the money was not meant to favor Artech.

 

“It’s not a bribe. We gave it to the Knights of Columbus because it’s for charity,” Baldoza said during the dialogue.

 

But Banias said he noticed that Baldoza, who is a member of the Knights of Columbus, was shaking and visibly disturbed while denying that the governor was involved.

 

All municipal governments under the Ileco 3 franchise are planning to pass resolutions opposing the 25-year power supply agreement with Artech.

 

Copies of the resolutions will be given to Ileco 3, National Electrification Administration, and the Energy Regulatory Commission and Department of Energy, Banias said.

Ileco 3 consumers nix Artech deal

 

By Francis Allan L. Angelo

 

DISTRIBUTION utilities (DUs) and electric cooperatives (ECs) must make sure that their consumers enjoy ample power supply at the cheapest cost, according to an Energy Regulatory Commission (ERC) official.

 

Rauf Tan, ERC commissioner, said these responsibilities of power utilities are embodied in the Electric Power Industry Reform Act (Epira) of 2001.

 

“In the Epira, the distribution utilities must look for the cheapest possible source of electricity for the end consumers,” Tan told The Daily Guardian.

 

Tan was reacting to the controversial 25-year power supply agreement between Iloilo Electric Cooperative (Ileco) 3 board of directors and Applied Research Technologies Phils., Inc (Artech).

 

Tan and fellow ERC commissioner Jose Reyes arrived in Iloilo City to conduct a hearing on the petition of Panay Electric Co. (Peco) and Panay Power Corp. regarding the latter’s asset recovery scheme.

 

The ERC officials said Peco and Ilecos 1, 2 and 3 must secure the energy needs of their consumers.

 

How will power distributors go about this?

 

“The utilities should ensure that they have enough power supply contracts to meet the requirements of their customers. They must undergo a competitive process which is expected to result in competitive prices (of power),” Tan said, apparently referring to the bidding process.

 

Under the Epira, all power supply contracts must be submitted to the ERC to establish the pricing mechanism and approval.

 

Tan said Ileco 3 will have to divulge to the commission the process it used to come up with the agreement with Artech.

 

“Ileco 3 will have to answer for that as they must show that the agreement is cost effective,” he added.

 

The Ileco 3 management headed by Dory Joy Canones, Financial Services Department head, assailed the Artech deal because it will drive up the price of electricity by 100%, from P6 per kilowatt-hour (kWh) to P12 per kWh.

 

Canones also claimed the management team was not involved in the approval and signing of the agreement.

 

Ileco 3 board president Mateo Baldoza and member Rene Arandilla also questioned the deal because Artech’s generation charge of P8.56 per kWh is higher compared to other IPPs.

 

A study of Ileco 3’s Technical Services Department showed that Global Power’s generation charge is only P4.82 per kWh, Asea One (P5.90 per kWh) and DMCI (P6.60 per kWh).

 

Artech did not join the bidding conducted by the Panay-Guimaras power consortium but made an unsolicited offer to Ileco 3.

 

Baldoza also claimed receiving P150,000 cash from Governor Niel Tupas Sr. and an Artech employee prior to the approval of the agreement.

 

Baldoza later contradicted himself when denied receiving money from Tupas who also denied the allegation.

 

PROBE

 

The National Electrification Administration (NEA) will investigate Ileco 3’s deal with Artech.

 

Percy Crisostomo, head of NEA’s Industrial Relation Development Department, said they will ask the Ileco 3 board to explain why it approved and signed the deal sans approval from NEA.

 

Crisostomo said the Ileco 3 board should have sought NEA’s approval first before signing the agreement with Artech.

 

NEA provides financial, institutional and technical assistance to ECs.

 

Crisostomo said the cooperative’s management team must be involved in negotiations for power supply agreements “because it will implement the policies and decisions of the board.”

 

The bidding process in power supply purchases is also important to ensure that electricity rates are beneficial to the consumers, Crisostomo said.

 

“The bidding will help the cooperative determine which offer from power producers is most beneficial to the clients. The consumers must also be consulted to get their stand on the agreement,” he added.

 

GATHERING STORM

 

Consumers and leaders of towns under Ileco 3 franchise are set to meet and decide on how to oppose the cooperative’s supply agreement with Artech.

 

Ileco 3 covers the towns of Anilao and Banate in the 4th district and Barotac Viejo, San Rafael, Lemery, Ajuy, Concepcion, Sara, San Dionisio, Batad, Estancia, Balasan and Carles in the 5th district.

 

Mayor Elizabeth “Besty” Salcedo said they are disappointed with the deal because Ileco 3 did not consult their constituents before approving the deal.

 

“There was no general assembly or hearing called on this mater. They should have consulted the consumers first,” Salcedo said.

 

Salcedo said she has been calling other mayors in the 5th district to discuss the issue.

 

“I will join the decision of other leaders to move against Ileco because we have to protect the interest of our people who are also consumers,” she said.

 

Earlier, Presidential Assistant for Western Visayas Raul Banias called for the revocation of the Ileco 3-Artech deal.

 

Banias said many leaders are disappointed with the decision of Ileco 3 to strike a deal with the independent power producer.

By Francis Allan L. Angelo

 

THE board of directors (BoD) of Iloilo Electric Cooperative (Ileco) 3 should revoke its power supply agreement (PSA) with an independent power producer (IPP), according to Presidential Assistant for Western Visayas Raul Banias.

 

Banias, the former mayor of Concepcion, Iloilo which is under Ileco 3 franchise, said consumers of the cooperative called him to express their indignation against the 25-year deal the Ileco 3 board signed with Applied Research Technologies Phils., Inc. (Artech).

 

Ileco 3 covers the towns of Anilao and Banate in the 4th district and Barotac Viejo, San Rafael, Lemery, Ajuy, Concepcion, Sara, San Dionisio, Batad, Estancia, Balasan and Carles in the 5th district.

 

“Many officials and consumers in the 5th district called me upon learning of the issue to express their disappointment and discontentment with the actions of Ileco 3 directors. I am also a consumer of Ileco 3 because I live in Concepcion and this agreement, if ever it is disadvantageous, will also affect me. Almost all of them are against the agreement,” Banias said.

 

Banias said the Artech deal should be revoked if it will burden Ileco 3 consumers with higher electricity rates.

 

Allegations of bribery have tainted the deal, the more reason why the board should revoke the agreement, Banias added.

 

Banias said he intends to write the Ileco 3 board and other government agencies regarding the issue.

 

“I am still gathering more information on this issue. The moment we find out that this contract is disadvantageous, I will write the board, Department of Energy (DoE), Energy Regulatory Commission (ERC) and National Electrification Administration (NEA) to express my sentiments. I am also consulting my lawyer so my letter will have legal basis,” Banias said.

 

If the alleged bribery by Governor Niel Tupas Sr. and Artech is proven, Banias said the Ileco board does not deserve to stay in office.

 

Banias also lauded Ileco board president Mateo Baldoza for divulging the alleged bribery.

 

“I am happy with his revelations. I know Judge Baldoza because he is related to me. I know his integrity and his probity is beyond doubt. He stood up for the consumers by exposing this alleged bribery,” Banias.

 

Baldoza earlier claimed that Tupas handed to him an envelope containing P75,000 cash during a meeting with Artech officials at the governor’s house April 17.

 

Another P75,000 cash was given to him by an Artech employee in a hotel in Iloilo City during the signing of the PSA April 21.

 

But Baldoza made a complete turnaround, contradicting himself in later media interviews. He said it was a female Artech employee, not Tupas, who handed the first cash-filled envelope.

 

Baldoza said he made a mistake in his first interview with Aksyon Radyo-Iloilo where he tagged Tupas in the alleged bribery.

 

Aside from Baldoza, Ileco 3 director Rene Arandilla and the management team headed by Dory Joy Canones questioned the deal because of Artech’s expensive generation charge of P8.56 per kilowatt-hour.

 

A study by Engr. Antonio Lazarraga, Technical Services Department manager of Ileco 3, showed that Artech’s price per kWh is higher than Global Power (P4.82 per kWh), Asea One (P5.90 per kWh) and DMCI (P6.60 per kWh).

 

Artech’s rates will increase Ileco 3’s charged by 100%, from P6 per kWh to P12 per kWh.

 

Canones said they will question the deal with NEA which regulates electric cooperatives.

 

Anilao Mayor Ma. Teresa Debuque, meanwhile, said they might transfer to Ileco 2 if Ileco 3 insists on the Artech deal.

 

Debuque said she asked officials of other electric cooperatives if they can move out of Ileco 3 franchise.

 

“It would take congressional action if we move out of Ileco 3 because the franchise is approved by Congress. I asked the Sangguniang Bayan to pass a resolution condemning the deal because it will jack up electricity rates by 100%,” Debuque said.

BRIBERY? Iloilo Governor Niel Tupas Sr. allegedly gave cash to Ileco 3 directors inside his mansion in Jaro, Iloilo City. (Photo by Tara Yap)

BRIBERY? Iloilo Governor Niel Tupas Sr. allegedly gave cash to Ileco 3 directors inside his mansion in Jaro, Iloilo City. (Photo by Tara Yap)

By Francis Allan L. Angelo

 

“BULIGAN ta lang sila (Let’s help them).”

 

These words and an envelope filled with cash are what former Judge Mateo Baldoza, president of the Iloilo Electric Cooperative (Ileco) 3 Board of Directors (BoD), got when he went to the house of Iloilo Governor Niel Tupas Sr. at MV Hechanova, Jaro Iloilo City last April 17, 2009.

 

The alleged bribery is being linked to the controversial 25-year power supply agreement (PSA) of Ileco 3 with independent power producer (IPP) Applied Research Technologies Philippines, Inc (Artech).

 

The PSA is being questioned by two Ileco 3 directors because Artech’s generation cost is higher than the offers of other five IPPs that joined the bidding conducted by the Panay-Guimaras Power Supply Consortium (PGPSC) last year.

 

Aside from Baldoza, also present in the meeting at the Tupas mansion were BoD vice president Emmanuel Pacardo, secretary Joy Fuentes, treasurer Asur Salcedo and Achilles Pama.

 

Those who did not show up were BoD members Rene Arandilla and Vicent Frances Espinosa.

 

“We were called one by one in one of the rooms inside the house. When it was my turn, Governor Tupas handed me an envelope while saying ‘Let’s help them’. I did not open the envelope until I got home. It was my wife who opened the envelope and found P75,000 cash inside,” Baldoza said in an interview with broadcast journalist Joel Tormon over Aksyon Radyo-Iloilo yesterday.

 

Baldoza said he also saw at Tupas’ house two Artech top honchos – company president Reynaldo Uy and vice president for marketing and business development Domingo Beltran.

 

Baldoza said he has no knowledge if the other BoD members also received cash “because we were called individually.”

 

Another envelope containing P75,000 cash was handed to the directors during the approval and signing of the Artech supply contract at Fine Rock Hotel in Iloilo City April 21, he said.

 

When asked if the money could be linked to the Artech deal, Baldoza said it might have something to do with the PSA because of the presence of Artech officials during the April 17 meeting.

 

“I did not touch or spend the money because I cannot accept it. The money is still intact and I intend to give it to the Catholic Church’s charity program,” Baldoza said.

 

DENIAL

 

In an interview with Aksyon Radyo, Tupas said he summoned the Ileco 3 board to a meeting in his house April 17 but no money changed hands.

 

Tupas said Uy presented their proposal to the Ileco 3 board during the meeting.

 

The governor said he favors the contract between Artech and Ileco 3 because of the power crisis in the province.

 

“The other power producers will operate in 2011 yet while Artech can supply immediately. I am more concerned with the supply because of the brownouts. When the other producers are done with their power plants, electricity rates will go down because of competition,” Tupas said. 

 

WHAT’S THE DEAL?

 

Based on documents obtained by The Daily Guardian, the controversy started when PGPSC, which is composed of seven electric cooperatives in Panay and Guimaras, solicited power supply bids from IPPs.

 

Five IPPs responded to the consortium’s solicitation – Global Power, DMCI, ASEA One, Global Green and PETROXY.

 

Artech did not join the solicitation and bidding but it submitted an unsolicited offer for consideration of the Ileco 3 board.

 

The board tasked Engr. Antonio Lazarraga, Technical Services Department manager of Ileco 3, to make a simulation and comparative study of Artech’s proposal with that of other IPPs.

 

Artech offered to operate a diesel-fired power plant and a biomass plant to generate electricity.

 

The study showed that Artech’s generation cost of P8.56 per kilowatt-hour was the highest compared to the rates offered by the other IPPs.

 

Global Power offered the lowest price at P4.82 per kWh, Asea One – P5.90 per kWh and DMCI – P6.60 per kWh.

 

Lazarraga submitted his study to the Ileco 3 board April 16. The following day, the directors were summoned to Tupas’ house where the alleged bribery happened.

 

Four days later, the board approved and signed the PSA with Artech despite the reservations expressed by Baldoza and Arandilla.

 

Baldoza said he wanted the board to study Artech’s price for 60 days because it would result in higher electricity bills for Ileco 3 consumers.

 

Ileco 3 covers the towns of Anilao, Banate, Barotac Viejo, San Rafael, Lemery, Ajuy, Concepcion, Sara, San Dionisio, Batad, Estancia, Balasan and Carles.

 

Ileco 3 consumers are presently paying P6 per kWh but if the cooperative starts drawing power from Artech, the rates will increase by 100% to P12 per kWh inclusive of distribution charges.

 

“Artech’s technology is good. But I had reservations because the power will be produced by a diesel power plant which is more expensive. The biomass plant will only kick in three years later. I asked the board to study the pricing and synchronize it with other cooperatives but we were outnumbered in the board,” Baldoza said.

 

Arandilla echoed Baldoza’s sentiments saying Artech’s rates will jack up prices of electricity in their franchise area.

 

“I also asked the board to study the offer for 60 days because we don’t want to burden our consumers with high prices of electricity. But two weeks after, the board approved the offer and contract with Artech,” Arandilla said.

 

Arandilla said Baldoza informed him about the April 17 meeting at the Tupas mansion but he did not attend because of a prior appointment.

 

By Francis Allan L. Angelo

 

TOWNS in two Iloilo electric cooperatives suffered power blackouts because generation and distribution problems.

 

Engr. Wilfred Billena, Iloilo Electric Cooperative (Ileco) 1 general manager, said their franchise area is suffering from rotating brownouts since Sunday after the Palinpinon Geothermal Plant in Negros and the 100-megawatt thermal power plant in Cebu.

 

Billena said they need 26MW to sustain power supply in their franchise areas “but because the two plants broke down, we had no choice but to resort to rotational brownouts.”

 

“My phone was swamped with text messages and calls from consumers who complained of prolonged brownouts. I told them that problem lies with the National Power Corp. because we only distribute power they produce,” Billena said.

 

Billena said local officials called him because the brownout occurred during their fiestas and other special events.

 

“Wakes and hospital operations were also disrupted by the brownouts. The Katamnan Festival of Oton was postponed late in the evening because there was no power. It’s embarrassing,” Billena said.

 

Billena said they expect the power situation in Iloilo and Panay to ease up in 2011 when the 164MW coal-fired power plant of Global Business Power Corp. goes online.

 

Based on data from the National Grid Corporation of the Philippines last April 16, Panay’s total demand is 208MW but its capacity is only 140MW, a deficit of 68MW.

 

“If only we did not drive earlier investors in power plants, we would not be suffering this problem. We really need a baseload plant, regardless of the fuel, that will run for 24 hours, 7 days a week so we will not suffer from brownouts,” he added.

 

BUSTED SUBSTATION

 

Five towns in northern Iloilo also suffered power blackout after the substation of Ileco 3 exploded for still unknown cause.

 

Engr. Antonio Lazaraga of Ileco 3 said the towns of Sara, Ajuy, Lemery, San Dionisio, and Concepcion have no electricity.  

 

Lazaraga said they are trying to fix the substation, which was bought and installed in 1986, and restore power supply in five days.

 

Reports surfaced that the substation was bombed. The Ileco 3 management has sought the help of the PNP 608th Iloilo Provincial Mobile Group to investigate the incident.

 

Lazaraga said the substation may have exploded because it is already old. 

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