Bohol Water posts losses of P5M, Bohol Light has net income of P15 million

The twin public utilities, now the object of a buy back option by their previous owner, incurred split earnings during their operations in 2005. This assertion was contrary to earlier claims made by buy back proponents that the Bohol Light Company and the Bohol Water Utilities are making money but yet the provincial government which owns 30% percent of the two utilities has not received a single centavo in dividends since the sale to the Salcon Group five years ago. In an audited financial statement released to the Post it was gathered that the twin utilities as a result of their operations in 2005 only, BLCI had a net income of P15,754,194 and BWUI had a net loss of P5,621,713. The figures were the result of the accounting made by the utilities' accountants ,internal auditors, and external auditors. The two companies retains the services of Sycip Gorres Velayor & Co. (SGV).

According to the same financial statement, for the last five years the two utilities had concentrated their efforts on improving the facilities of the former Provincial Electric System (PES) and Provincial Waterworks System (PWS) to raise the level of efficiency of the twin-utilities which were formerly managed and operated by the provincial government of Bohol. BLCI Manager Noel Alingig said, when they took over the operation of the electric system in the city, it posted a system's loss of 18% which is way beyond the 9.5% rate that the then Energy Regulatory Board (ERB) now Energy Regulatory Commission (ERC) has allowed. A system loss is the amount of energy that is being taken by a distribution entity from NAPOCOR but is lost due to technical losses and non-technical losses generally pilferages.

In order to reduce the system's loss and increase its revenues, the company introduced various rehabilitation works, which were all mandated in the Joint Venture Agreement (JVA) that governs the partnership between the provincial government and the Salcon Group. Among the projects which were undertaken to improve the electric system were the construction and installation of three new power substations with a total capacity of 20MVA; conversion of the old primary lines from 2.4 kv to 13.8 kv; reconstruction and upgrading of 13.8 kV lines with extension to other areas; revamp of secondary lines and replacement of poles from wood to concrete ones, purchase of additional distribution transformers and accessories; upgrading of system line protection equipment; acquisition of modern pilferage detection equipment and tools; acquisition of service vehicle and communication gadgets, human resource development, construction of administration building and acquisition of equipment and the implementation of demand-side management (DSM) power factor correction program. All these rehabilitation activities were undertaken within the span of five years from take over date. “All our time, financial resources and efforts were spent for the improvement of the system. Now, we have succeeded in hitting the standard 9.5% system loss rate, Alingig said.

Despite the fact that the JVA allowed the twin companies to increase their tariff rates even after a minimum of two years from take over, they did not do it. The BLCI manager said, “so the public may know, it is only the basic rate for electricity that BLCI is prohibited to increase within five years but on power cost adjustments (PCA) and other factors, we are allowed under the JVA to ask for increase after our second year of operation”. However, because we want to show to the public that we are sincere in our commitment, we did not ask or impose any increase in the PCA and other factors that comprise the over-all power or electricity cost until such time that we have completed all the rehabilitation programs we have lined up, he added. Generation cost from NPC was responsible for BLCI's rate movements in the last five (5) years. While it is true that BLCI posted a net income of P15.754 million in 2005 or on the fifth year of its operation, the fact remains that the power company suffered a total of more than P30 million in losses during the first four years.

In other words, the difference between the net income of P15.754 million in 2005 and the loss of more than P30 million from 2000 to 2004 is still a total net loss of P14.7 million. For its part, the Bohol Water Utilities, Inc. (BWUI) has reported a net loss of P14.020 million on the same year. However, it is worthy to note that like BLCI, BWUI has also embarked into a massive upgrading of its facilities after it took over the management and operations of the old provincial waterworks system, which was also under the defunct Provincial Public Utilities Department (PPUD). Under the PPUD management, the waterworks system suffered a system loss of up to 41.3%, a figure that is also beyond the rate allowed by the National Water Resources Board (NWRB) of 25%. BWUI also did not pass on to its consumers the cost of the system's loss but opted to shoulder it and took it as a challenge. Through its sheer determination and commitment, BWUI was able to reduce its system's loss from 41.3% on turn over date to 20% at present, which is even lower than the NWRB allowable rate. BWUI could be credited to all the improvements it had introduced to the PWS which include among others; construction of three new water reservoirs, two in Dampas near the Divine Mercy Chapel which have a total capacity of 2, 000 cubic meters and the other on Mt. Banat-i in Bool with a capacity of 750 cubic meters or a total of 2, 750 cubic meters; development, refurbishment and installation of new pumps in water wells and pumping stations both in Tagbilaran City and Corella town; laying of a total of 55 kilometers of transmission and distribution lines all over its franchise area; installation of water treatment facilities, acquisition of two generator sets and others.

With all its rehabilitation programs, BWUI has now increased its water production capacity from 10, 822 cubic meters in the year 2000 to 18, 570 cubic meters a day and pumping capacity from 11, 966 cubic meters to 25, 620 cubic meters a day at present that would be enough to supply the demand of its consumers whose number has also increased from 7, 605 in 2000 to 10, 762 at present or an increase of more or less 30%. To provide flexibility of its operations, BWUI has succeeded in establishing at least service clusters, which are operated independently from each other and are all intended to serve its customers in different elevation levels, thereby minimizing the effects of low water pressure due to power outages.

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