Court fails to solve CPPC-VECO row

The court yesterday failed to resolve the petition filed by the Visayan Electric Company for a writ of preliminary injunction against Cebu Private Power Corporation.

In effect, CPPC cannot stop supplying power to VECO and cease its operation as VECO maintained its stand that CPPC should abide by their 1997 contract.

In response to VECO's complaint, CPPC legal counsel Lawrence Arroyo asked the court to dismiss the petition, citing that only the Energy Regulatory Commission and not the court has jurisdiction over the matter.

Arroyo said VECO's petition should be dismissed since it did not undergo the required arbitration proceedings by the ERC.

But Jess Garcia, VECO's lead counsel, countered that their petition is within the ambit of the court as it falls within the Obligations and Contracts under the Civil Code of the Philippines.

Garcia said that what VECO wants is for the CPPC to abide by their 1997 contract. Besides, Garcia argued that the dispute is not about rates, fees, fines and penalties but about compliance of a contract.

He said that once CPPC stops supplying power to VECO, there would be a series of brownouts.

Arroyo, however, argued that the court could not direct any businessman on how to operate his business, especially when he is losing. "If the court will tell businessmen how to operate their businesses, then no businessman will invest in this country," Arroyo said.

CPPC said that it would lose P60 million a month if it will go back to the original contract with the VECO and continue to operate.

In 1997, VECO and CPPC entered a 15-year contract under which the CPPC agreed to sell power to VECO at two percent lower than Napocor's rate.

However, on June 3, 2004, both firms entered into a one-year interim agreement allowing CPPC to sell power to VECO at a higher rate than what was stipulated in the original contract.

Garcia told the court that CPPC is now trying to run away from its obligation, and added that when it voluntarily signed the contract in 1997, CPPC must have realized that it was a case of a 'bad business decision'.

"VECO never forced CPPC to sign the contract, it was their voluntary act and now they cry foul," Garcia said.

The interim agreement was supposed to expire on June 2, but it was extended until November 25. But prior to the expiration of the agreement, the CPPC announced that it would cease its operation and stop supplying power to VECO on November 26.

But due to the intervention by some local government units and the filing of the VECO petition, CPPC did not push through with its plan.

Arroyo said CPPC and VECO should bring the matter outside the court and start negotiating in good faith. But Garcia maintained that the court should be the one to solve the dispute.

Regional Trial Court Branch 10 presiding judge Soliver Peras scheduled the next trial of the case for December 8. - Mitchelle P. Calipayan