Paleco denies favoring power supplier DMCI

Delos Santos says that the imposition of 12 percent on Paleco’s gross receipts is also mentioned in the BIR’s Revenue Regulation 13-2018. (File photo)

The Palawan Electric Cooperative (PALECO) has refuted an allegation made by civil society groups in Palawan that it is not doing anything to oblige DMCI Power Corporation (DPC) to comply with its power supply commitment and pay its supposed penalties.

PALECO general manager Ric Zambales said they have already collected P4.5 million-worth of penalty payments from DPC, and reduced its dispatching capacity, following the National Electrification Administration’s (NEA) recommendation on priority dispatch order.

He was responding to a letter-complaint sent by a Palawan civil society group accusing PALECO of not compelling DPC to adhere with its commitment per power supply agreement (PSA) and non-collection of penalties amounting to P68 million as of 2015.

“The amount of penalty which was initially computed at P68 million was not final that time, thus the news of the amount came out unofficially,” Zambales explained in the letter he sent to the group on Friday.

Zambales said DPC questioned the computation, prompting the Steering Committee to convene to settle the dispute, and eventually agreed on the final penalty of P9.9 million.

In the discussion, he said, “both parties agreed to deduct from the computed value the following instances wherein the supplier, in this case, the DPC, is not identified as the cause of the problem.”

Zambales said among these problems are: line constraint due to the National Power Corporation’s tie-line between Irawan and Paleco switchyard; the capacity that was not delivered was computed by taking the difference between the nominated capacity and actually delivered capacity (nominated capacity is based on the day-ahead capability report submitted by DPC); and cascading blackouts caused by other independent power providers, by vegetation and transmission line.

“Regarding DPC’s payment on the imposed penalty, PALECO has deducted from the power supply payment the recurring amount of P500,000 since August 2017. As of this date, the total amount paid by DPC is P4.5 million,” he added.

Paleco said it is continuously monitoring DPC’s compliance to the PSA since 2015.

“In fact, we have again computed additional penalties for 2016 and 2017 operations. We are still waiting for DPC’s comment on the penalty and will forward the same to the Steering Committee for confirmation,” he said.

Zambales said they reconvened the Steering Committee to resolve the penalty imposed by the DPC to Paleco for allegedly “not dispatching DPC according to merit order and not dispatching the 25-megawatt guaranteed dependable capacity.”

“The reduction on the DPC capacity being dispatched is the one being cited by DPC to impose the penalty to Paleco,” he said.

Since the third quarter of 2017, the Senate Committee on Energy has conducted series of hearings, wherein it tasked the NEA to conduct a technical audit on the operations of Paleco and submitted solutions to resolve recurring blackout issues in the province.

“One of NEA’s recommendations is to reduce the dispatch of DPC and change the order of priority. This is due to their findings on technical constraints of DPC’s generating sets, specifically the size and speed not being capable to provide stable supply as needed by the Palawan main grid,” he recalled.

Zambales, meanwhile, assured the consumers of a stable power supply of 73.7 MW against the peak demand of 51.3 MW as of April 2018.

Once the ERC approves the PSA of Langogan Power Corporation this year, he said 14.8 MW renewable energy will be added to Paleco’s total capacity. “This is aside from the Paleco’s plan to have a CSP (competitive selection process) for another 10 MW of green energy in the main grid,” he added.

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