PALECO Board split on Supplemental PSA of DMCI

Inside the Conference Room of Paleco (Palawan News file photo)

The Board of Directors of the Palawan Electric Cooperative is divided over moves to grant a supplemental Power Supply Agreement (PSA) to DMCI Power Corporation.

“Busisiin at pag-aralan. Maging transparent tayo sa bawat isa kung itutuloy ang supplemental PSA. Hindi na natin kailangan ng supplemental agreement kung natutupad lang nila ang kanilang pangako na magbibigay ng 25 guaranteed dependable capacity sa Palawan,” Atty. Raymund Acosta, board chair said.

Acosta is joined by vice chair Maylene Ballares and Director Babes Serratubias in opposing the granting of the PSA to DMCI Power.

“We want the member- consumers to be involved in making the important decision,” Acosta said.

DMCI Power Corporation is seeking a Supplemental PSA from PALECO as a requirement of the Energy Regulation Commission for the conversion of its engines from diesel to bunker fuel. DMCI claimed that once the engines are converted to bunker fuel, their services will be improved and the cost of electricity will be reduced.

Acosta pointed out that DMCI committed several violations on its original PSA during the height of power crisis from January to June this year.

Ballares said there is already a draft supplemental PSA but their move to push for its approval was prompted by unclear provisions of the agreement which may put the board in bad light.

“Hindi malinaw kung brand new ang makina na dadalhin, sinasabi nila cheaper ang cost ng kuryente pero magkano ‘yun, ang default nila hindi pa nila nababayaran. Kailangan pag-aralan natin ng mabuti,” she said.

Paleco counsel Atty. Zoilo Cruzat said that conversion of engines should be assessed on how effective and beneficial it is.

He also pushed for DMCI’s compliance to the 25 megawatt dependable capacity stated in the original PSA.

“Ang purpose ng supplemental PSA ay punuan ang kakulangan pero we have to scrutinize properly the provisions incorporated in the supplemental agreement,”Cruzat said adding that during the time when the original PSA is being crafted, DMCI gave “sweet talks” to Paleco but it turned out that DMCI was not able to deliver their promises.

“Di ba noong kinausap kayo ng DMCI, di ba mayroon silang sweet talks? Ngayon, what happened?” Cruzat said.

Director Rudy Garceron of District V (Narra), DMCI’s engines will be arriving in December and the agreement with the power company cannot be easily terminated.

Director Julieta Magbanua of District IV (Aborlan) stressed that the board has agreed to grant the supplemental PSA and what the chair has to do is to sign the agreement.

“Basta approve na ‘yan so pirmahan na lang ng chairman,” Magabanua said.

Acosta moved to involve the member-consumers of Paleco in crafting a decision on the supplemental PSA of DMCI.

What happened to DMCI fine?

Paleco has sent a demand letter to DMCI dated June 6 for the fine of P68.6 million for its failure to deliver its contracted dependable capacity of 25 megawatts which resulted to frequent brownouts in Puerto Princesa Cit and other municipalities in Palawan.

Paleco has also sent a final notice of default to DMCI demanding that they are given 30 days starting July 1 to provide 25 megawatts of power.

DMCI asked PALECO to create a technical working group who will be represented by both parties and will assess and review the damages that is asked from them.

Ballares DMCI has not settle the fine instead they want to elevate this matter to arbitration.

She questioned the failure of DMCI to settle its Notice Default for non-payment of fine.

Cruzat pointed out that based on the PSA the fine must be immediately deducted to DMCI and it is up to DMCI to question.

“Ang aking pagkakaalam based sa PSA ko ay automatic deduction. Kung gusto nila they go to arbitration but as long na walang decision ang arbitration we will deduct,” Cruzat said.

Acosta is firm on his decision not to sign the supplemental PSA instead he wants the issue be subject to consumers’ decision.

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