Pampanga power firm seeks new generator partner to lower monthly rates

Field workers of the San Fernando Electric Light and Power Company repair power lines in Pampanga’s capital city. (Photo from Sfelapco’s Facebook page)

CITY OF SAN FERNANDO, Pampanga—The San Fernando Electric Light and Power Company (Sfelapco) has started looking for a new power generator to lower the monthly electric bills of its customers here, in Floridablanca town and parts of Bacolor in Pampanga province, its officials said.

Residents and owners of business establishments in these localities have been complaining about the more than P4 per kilowatt-hour (kWh) increase in their bills since January of this year, after the generation charge being collected by Sfelapco went up to around P7.87 per kWh.

The higher generation charge rose from P4.43 per kWh in December last year, excluding the 12-percent value-added tax (Vat).

In a statement, Sfelapco senior vice president and general manager Jose Lazatin said the company has started its competitive selection process and that several power generation firms have already expressed interest in supplying Sfelapco with “stable and affordable energy.”

Lazatin said the generation companies were given until March 31 to obtain bid documents and participate in the selection process.

“We have been receiving notices from other generators that they might have available renewable energy sources by the end of this year or early next year,” he said.

Lazatin added: “We might be lucky enough that more generation companies would participate in the bidding process.”

Expired agreement

Sfelapco started charging higher generation rates at the start of 2023 after its power service agreement with Aboitiz Power Renewables, Inc. (Apri) expired in December 2022.

The power supplier, which generates electricity through its geothermal power plants, charged Sfelapco an average of P4.43 per kWh generation rate from January to December 2022.

The rates were based on its power supply agreement with Apri in 2012 and did not include VAT as the electricity came from a renewable source.

After Sfelapco entered into a Department of Energy-approved six-month emergency power service agreement with GN Power Mariveles (GNPM), which operates a coal-fired power plant in Bataan province, the generation charge increased to an average of P7.87 per kWh without VAT or P8.81 per kWh with VAT.

Lazatin said Sfelapco must conclude the competitive selection process before its emergency power service agreement with GN Power Mariveles expires in June.

“We hope and we pray that it will be finished before the six months, barring any other unforeseen circumstances,” he said, adding that the process was already in its final stage.

Lazatin said they would invite Mayor Vilma Caluag to observe the competitive selection process.

Opposition

Caluag and other city officials, along with officers of business groups and homeowners’ associations, have opposed the generation charge increase in this city.

The mayor said she had already hired lawyers and consultants for this purpose.

During the Senate Committee on Energy hearing on March 20, Lazatin pointed out that Sfelapco had provided its consumers with the lowest generation charge in Central Luzon from 2013 to 2022.

Lazatin said other power distribution firms in the region started charging higher rates after the price of coal increased.

He said Sfelapco could maintain its low rates, as it was sourcing power from Apri, which did not use coal for its generating plants.

Lazatin said San Fernando residents were “shocked” by the sudden increase in the generation rate because they got used to paying a “very low” generation charge when Apri was still supplying electricity to the distribution company.

He expressed the hope that consumers would see lower generation rates in their bills once Sfelapco enters into a new power service agreement with another generation company.

Blended

In comparison, the Pampanga Electric Cooperative II, which serves Mabalacat City and several towns in the province, collected a “blended generation charge” of P9.05 per kWh from its customers based on their latest bills.

One of its sources of electricity is Apri, which provided 39 percent of the power cooperative’s electricity requirement last month at P14.29 per kWh.

In an interview on Wednesday, Sfelapco corporate communication officer Irwin Nucum said Apri’s current rate is higher than GN Power, based on generation costs posted by other power distribution companies in Pampanga and other parts of Central Luzon.

“The average of P4.50 per kWh generation charge collected by Sfelapco from 2013 until the end of 2022 was based on Apri’s rate when we signed our 10-year power supply agreement with the generation company,” Nucum said.

He added: “Apri’s rate is higher. So even if the agreement between Sfelapco and Apri were renewed, the generation charge would be based on its current rate, which is obviously much higher than 10 years ago.”

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JPV