Paleco considers termination of non-performing power providers

The Palawan Electric Cooperative (Paleco) has assured consumers during the press conference held Tuesday, May 16, that it will pass a resolution to possibly terminate agreements with independent power producers (IPPs) that are found to be inefficient in their services. These IPPs that may face such penalty include DMCI Power Corporation, Palawan Power Generation Inc. and Delta P Inc.

Paleco Board Chair Jeffrey Tan Endriga said they will seek the technical assistance of the National Electrification Administration and the provincial government in assessing the existing engines of the said power providers.

“Dito tayo mag-base kung paiikliin natin ang kontrata. It’s either i-cancel or i-shorten ang contract nila,” Endriga said.

Paleco General Manager Ric Zambales Sr said the IPPs are not delivering their contracted power capacity due to frequent preventive maintenance of engines. Specifically, instead of 53.7 MW, the IPPs are only dispatching around 40MW.

Cynthia Sumagaysay–Del Rosario of Palawan Alliance for Clean Energy (PACE) pointed out that DMCI has been violating its contract with Paleco since 2012. DMCI—as well the other power producers—have continuously failed to deliver the expected power supply due to high-speed engines, which supposedly dispatch 25MW. According to Del Rosario, such failure is enough for Paleco to terminate its engagement with DMCI.

“Kung ganito since 2012, grabe na ang violation sa contract nila,” Del Rosario said.

According to DMCI, the high-speed engines were installed in anticipation of the coal power plant that they’ve been proposing for the province. Since such plans were not pursued, the company has been trying to change the engines to low-speed ones, hence causing the massive power outages, particularly starting in 2015.

Angry Consumers

Heavily disgruntled consumers, including those from the business sector, have been airing their sentiments against Paleco and its power providers through social media (READ: Frustrated netizens dub Palawan as PH’s “blackout capital”). Many have criticized Paleco’s seeming inaction over the persistent problem in the province’s power supply.

“Solusyon ang gusto namin. Ipaglaban ninyo ang mga consumers ninyo,” said former Vice Governor Art Ventura.

Endriga admitted in the forum that such public clamor has helped them raised the urgency of the problem.

Paleco, through Engr. Ric Adajo, also clarified that the recent blackouts that prompted stronger backlash from consumers were due to the tie-line upgrades from Irawan to Tiniguiban. Endriga explained that the said tie-line upgrading, which will allow the accommodation of 53MW from 40MW, was delayed due to a lack of budget on the part of the National Power Corporation.

Meanwhile, PACE’s Del Rosario emphasized that the lack of studies on the province’s grid capacity prior to the approval of PSAs is among the major reasons for the current power supply problem in Palawan.

Steady Supply, Penalty Clause

Paleco has assured consumers that there is now a steady and sufficient power supply in Palawan to cover the peak demand of 48 MW. Should the four power produces deliver according to their contracts, the total power supply available would be 80.3MW: Delta P – 13.5 MW (plus its new plant with 26.65 MW), PPGI – 15.2 MW and DMCI – 25 MW. Paleco also assured consumers that reserves are already in place.

Delta P’s new power plant, which has been recently approved by the ERC, is operating in Bgy. Sta. Lourdes, Puerto Princesa. Unlike previous cases, the new PSA with Delta P now comes with a ‘penalty clause’ wherein the company will pay Paleco a fine of Php 25,000 for each day of delay beyond COD or a maximum of Php20M.

Rate Discount

Endriga also shared that the Board is presently contemplating to pass a resolution that will request the ERC to consider extending discounts to consumers for their bills incurred during the periods when power outages were frequent.

“May resolution nga kami na i-inventory (ang mga apektado) tapos pasahan natin ng resolution sa AGMAM (Annual General Membership Assembly Meeting) para magamit natin ito sa pag-file sa ERC,” Endriga said.

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