Power crisis in Palawan averted | Inquirer News
Napocor makes partial payment to IPPs

Power crisis in Palawan averted

/ 04:40 AM October 01, 2022
ALL IN A DAY’S WORK Amid threat of a power cutoff in Palawan due to unpaid government subsidy to independent power producers, linemen of Palawan Electric Cooperative proceed with their regular maintenance activity on the cooperative’s distribution lines in Puerto Princesa City in this photo taken on Sept. 2. —PALECO PHOTO

ALL IN A DAY’S WORK Amid threat of a power cutoff in Palawan due to unpaid government subsidy to independent power producers, linemen of Palawan Electric Cooperative proceed with their regular maintenance activity on the cooperative’s distribution lines in Puerto Princesa City in this photo taken on Sept. 2. —PALECO PHOTO

PUERTO PRINCESA CITY — The looming widespread power interruption in Palawan province was prevented after the major energy players managed to make an initial payment to sustain the operational costs of local power producers.

This power crisis was avoided after the National Power Corporation (Napocor) made a partial payment of at least P68 million for the Universal Charge Missionary Electrification (UCME) subsidy due to independent power producers (IPPs).

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The IPPs supply electricity to Palawan Electric Cooperative (Paleco) and the UCME subsidy is given by the national government to power suppliers in off-grid areas to achieve total electrification in the country.

In September, Delta P Inc., one of the IPPs, informed Paleco of its possible shutdown by the end of this month due to an unpaid UCME subsidy from Napocor amounting to P441,826,773.

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According to Delta P, the unpaid subsidy resulted in a “staggering amount” of fuel bills that it needs to settle.

Cash basis

Delta P said it was required by fuel suppliers to pay cash before they could acquire fuel supplies for their next purchases, adding that if the matter was not resolved by the end of September, they would be forced to shut down.

As the biggest power supplier of Paleco, Delta P generates 20 megawatts, and its shutdown may result in rotational power interruptions in the city.

Napocor officials said a power shutdown was already prevented following the initial payments they made to Delta P and other IPPs.

Larry Sabellina, vice president for Napocor’s Small Power Utility Group (SPUG), on Tuesday explained to the Provincial Board that the delay in the UCME allotment was due to the rising cost of fuel amid the war in Ukraine.

According to Sabellina, the base price for their contracted fuel more than doubled—from P37 per liter to P70 to 80 per liter.

Fund sourcing

“The volume [of fuel] we procured to sustain our operations in all SPUG areas will last until Nov. 12. So, this is very critical. We are all affected, but the [Napocor] is still [doing] its best efforts [to secure] funds from the national government,” he explained.

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Ma. Annabel Versoza, head of Napocor’s department of corporate affairs group, said they managed to source out funds to pay the subsidy and have also sent letters to the IPPs explaining the delay.

On Tuesday, Paleco officer in charge Neriza Regal confirmed that Napocor had paid P68 million out of its P441,826,773 UCME subsidy dues for Delta P.

“For the two other providers (DMCI Power Corp. and Palawan Power Generation Inc.), we are yet to receive news from them, but hopefully they will be paid partially by the [Napocor] because the government ordered [Napocor] to secure loans for immediate payment,” Regal said.

But Versoza said they have also made payments amounting to P136 million to DMCI Power and P23 million to Palawan Power.

According to Versoza, the Energy Regulatory Commission has approved an interim relief of P2.6 billion to cover the remaining balance of subsidies, the payment of which will start by November. INQ

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Paleco downplays persisting brownouts in Puerto Princesa City

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TAGS: Palawan, Palawan Electric Cooperative (Paleco), Power crisis
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