Power firm accuses Cebu luxury hotel of theft

By Karlon N. Rama
Tuesday, November 29, 2011


CEBU CITY (Updated) -- The Visayan Electric Co. (Veco) filed Monday a criminal complaint that accuses a Cebu City-based hotel of pilfering over 27 million kilowatt-hours of electricity, worth at least P168 million, between April 2007 and February 2011.


Through Ricardo Lacson Jr., its vice president for administration and customer service, Veco accused the hotel of cutting two cables Veco installed so that the hotel could, while continuing to draw power, bypass two of the three meters set up to monitor power consumption.


This, according to Lacson’s affidavit, was done “intelligibly, with deliberate intent and with intent to gain.”


In a statement, the hotel said it “vehemently denies any allegations of criminal wrongdoing.”


“These issues may already have been ventilated and submitted for resolution before the Energy Regulatory Commission (ERC), where a case was filed by Waterfront against Veco last April 2011 and a cease-and-desist order against Veco has been issued,” the hotel management said.


Hotel representatives declined to comment further.


“In the meantime, Waterfront and its officers and staff would like to assure its guests, the Cebuano community and the general public of its continued operations and services and it will bring these baseless accusations to a proper resolution,” the statement read.


The ERC-Central Visayas also confirmed Monday that Waterfront Hotel indeed filed a consumer complaint against Veco last April.


Threat


ERC-Central Visayas Director Joel Bontuyan said the hotel management filed the complaint after Veco allegedly threatened to cut off their power connections.


Bontuyan said the complaint was filed by the hotel management with their central office in Manila, which conducted a hearing with the hope of reaching an amicable settlement.


Only the court can determine if there was any criminal liability, he said.


At that time, Bontuyan said, Veco asked for P69 million but Waterfront offered only P2 million.


Veco, through lawyer Jess Garcia, filed the complaint against Waterfront before the Office of the Cebu City Prosecutor. Following office procedures, the complaint will be raffled to a prosecutor for preliminary investigation within the week.


The complaint cites Republic Act (RA) 7832, or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994.


It impleads Kenneth Gatchalian, hotel president; Marco Protacio, area general manager; Carlo Sainz, resident manager; Ferdinand Vincent Lazaro, group chief engineer; Loulainetto Lauron, chief engineer; and Jose Francis Cañizares, assistant engineer.


Zero reading


Based on Lacson’s affidavit, the hotel’s alleged violation was discovered last February 7, 2011, when a group from Veco conducted a “routine check” on the hotel’s power substation.


According to Lacson, their technical people found the severed cable and noticed that two of the hotel’s three meters had “zero reading.”


He said Veco personnel then fixed the severed cables, referred to in the complaint as two #10 AWG wires, and then attached a seal to prevent tampering.


However, in a follow-up inspection last February 11, inspectors supposedly found the wires to have been cut again.


Veco, in its complaint, placed damages as a result of the incident at P168 million, saying the hotel managed to siphon off 27,469,951 kilowatt-hours from April 2007 to February 2011.


Garcia, interviewed at the Office of the Cebu City Prosecutor, did not state why the utility company believed that the alleged pilferage began in 2007 yet, saying only that they “found indications in the substation grounds.”


“The bottom line is they consumed electricity they didn’t pay for,” he said.


Benefit


RA 7832 prohibits, among other things, the tapping of overhead lines, tapping into the electric service of others, and tampering with or destroying electric meters, wires or conduits “to interfere with the proper or accurate metering of electric current.”


Knowingly receiving the “direct benefit” of electricity obtained through prohibited means is already a violation under the 1994 law.


The presence of tampered, broken, or fake seals on a power meter is considered prima facie evidence. As penalties, the law specifies imprisonment, fine, or both, at the discretion of the court.


In reaction to acts of tampering, utility firms have the right to “disconnect immediately” a client’s service after serving a written notice or warning “without the need of a court or administrative order.”


Utility firms may also “deny restoration of the same.”


Ethel Natera of Veco’s Corporate Communication Department, for her part, said they made prior demands on the hotel before lodging the criminal complaint.


However, she added, the hotel did not act on it.


Open


A source from the Veco side said the hotel instead filed an administrative complaint for direct connection with the ERC, a fact confirmed by an entry in the June 2011 case calendar of the ERC.


Asking not to be identified, the source revealed that administrative complaint sought the ERC’s help in stopping Veco from disconnecting the hotel’s power connection while the administrative hearing is ongoing.


The ERC issued a temporary injunction, as borne out in the hotel’s press statement Monday, and the hearing remains ongoing.


Natera explained that they are constantly watching out for similar incidents but pointed out that alleged pilferage of Waterfront is the biggest they have discovered thus far.


She confirmed that Veco made a similar demand on another hotel sometime ago. The hotel settled out of court and made a public apology.


Like in the previous case, Garcia said, Veco is “open to a settlement.” (With Elias O. Baquero and Kat O. Cacho/Sun.Star Cebu)


Published in the Sun.Star Cebu newspaper on November 29, 2011.