Consumers of debt-ridden Daneco fume over impending power outages

Jun. 10, 2014

TAGUM CITY – Member-consumers of Davao del Norte Electric Cooperative are enraged that more power outages will be done soon because the firm failed to pay its half a billion debt to the Power Sector Assets and Liabilities Management (PSALM) Corporation.

On Wednesday, the PSALM issued a stern warning to Daneco that its franchise areas in the provinces of Davao del Norte and Compostela Valley “could face massive blackouts due to an impending disconnection.”

“After exhausting all possible remedies, PSALM has issued a final demand to DANECO for failure to comply with its financial obligations, and the period to comply with such final demand has already lapsed on 21 March 2014,” PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr. said in a statement.

For bakeshop owner Tina Diaz, 38, said “this only shows that Daneco is not sincere enough to perform its obligation to the people. Where’s the money that the people paid to them? It would be unfair if we will pay the price for their misdeed.”

Lumbayo scored both Daneco factions for being “selfish and insensitive” to the sentiments of the people.

“(T)hey should stop their “tug-of-war” as to who controls Daneco. Look now, consumers are paying the price of their pride and egocentric act,” Diaz said.

Business sector directly affected by the power outages also aired their side and has reported of losses.

“I have suffered last summer and I don’t want a repeat of blackouts again. My business is losing every time there’s a blackout. I am hoping that Daneco will resolve this issue,” said 38-year old businesswoman Alicia Montalban who owns four stores of ice cream parlor in this city.

“Daneco must give us the service we deserve. It is an injustice in our part that we need to suffer from blackouts because of debts  that are not ours,” Montalban said.

Hotel Front desk officer, Rico Razon,28, said “(W)e pay our bills regularly but we don’t understand why DANECO’s bills are left unsettled. We don’t deserve to be treated like this. Something is wrong with their financial management,” Razon said.

Diona Abaquita, Daneco-NEA Information Officer, confirmed to DavaoToday that Daneco has an outstanding unpaid obligation of PhP576,453,319.08 to PSALM.

Abaquita told Davao Today that “anytime soon, the PSALM will issue the notice of disconnection to Daneco since the former has already sought the approval of the Department of Energy (DOE) for approval of the disconnection notice.”

DANECO’s outstanding obligation amounted to about PhP230 million (PhP232,944,772.01) when its power accounts were transferred from  the National Power Corporation to PSALM in June 2009.

According to PSALM, it approved the restructuring of DANECO’s outstanding Value Added Tax (VAT) account amounting to PhP106,556,231.49, with a monthly amortization of PhP4,439,842.98 for a period of two (2) years or from March 2011 to February 2013.

“But it has failed to fully settle its monthly Power Bills (PB) starting July 2012,”  PSALM said.

PSALM added “DANECO’s  operations starting June 2012 was affected due to the legal dispute between DANECO-National Electrification Administration (NEA) group and DANECO-Cooperative Development Authority (CDA) group.”

Daneco-NEA entered into a three-year agreement with PSALM for its restructuring of its obligation amounting to PhP274,993,033.54 from June 2013 to  March 21, 2013.

PSALM claimed that “DANECO continued to incur unpaid PB for the reason that while DANECO-NEA group was dutifully paying PSALM for its PBs, the DANECO-CDA group’s payment is not up-to-date as the last was made in December 2013.”

Aside from PSALM, the Daneco-NEA has unsettled monetary obligations also to other power suppliers such as the Engineering Equipment Inc. (EEI) Power Corp. (P101.93 million), Therma Marine, Inc. (TMI) (P50.94 million), National Grid Corp. of the Philippines ( P12.76 million).

“(W)e are intensifying our collection and payment systems. Thus, we are encouraging our member-consumers to pay and settle their debts to us to avoid the disconnection of power,” Abaquita said. (

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