Power firm won’t withdraw from deal

PUERTO PRINCESA CITY—The company blamed for plunging Palawan province into a power crisis will not withdraw from a deal it has made with the Palawan Electric Cooperative (Paleco) despite the intervention made by the Department of Energy (DOE) and consumers.

In a forum called by the provincial government on Friday, the Consunji group’s DMCI Power Inc., which plans to put up a 15-megawatt coal-fired power facility in Palawan, denied Paleco’s accusation that it had reneged on their contract, causing severe shortage of electricity that lead to daily brownouts lasting four to five hours.

Acting Energy Secretary Zenaida Y. Monsada and former Energy Secretary Jericho Petilla, who both attended the meeting, vowed to help Palawan recover from its power problem by offering to facilitate the reentry of National Power Corp. (Napocor) to fill in the supply gap.

Petilla, however, said that because of Paleco’s already existing multiple contracts with other providers, Napocor will only come in “if DMCI opts to withdraw from its contract.”

“The problem is that the contracts are not being respected. There should be no problem if the IPPs (independent power producers) are sticking with their contracts,” Petilla said.

Inadequate supply, with DMCI failing to meet about half of its contracted obligation to provide 25 MW of electricity to Paleco, along with the breakdown of engines of other small power facilities, have been causing prolonged blackouts throughout the Paleco franchise since the onset of summer.

DMCI vice president Henry Alcalde said his company had already complied with a recent agreement it forged with the DOE and Paleco to supply additional generator sets this week and increase its generation capacity. “By July 24, we will have 27 MW and 29 MW by the end of December,” he said.

Alcalde dismissed the notice of default the company received from Paleco, which had demanded a penalty payment of over P60 million from DMCI for failure to abide by its supply agreement.

“They are talking about the recent period. But what about the period when we were not allowed to produce power because of their transmission problems,” he said.

Paleco general manager Ric Zambales said “it remains to be seen” if DMCI would abide by their agreement for the company to immediately boost its generation capacity.

“But whatever is the case, they will still be using diesel generators that are not reliable to continuously provide power. These are high-speed engines and they break down easily,” Zambales said.

DMCI was the winning bidder for the 25-MW electricity contract awarded by Paleco over two years ago based on a proposal to put up a coal-fired power facility combined with diesel generators for back up.

Since winning the deal, however, it had faced opposition from environmentalists and local communities opposed to building a coal-fired power plant.