Debts put in peril electric supply in Palawan

PUERTO PRINCESA CITY—Electricity suppliers in Palawan have threatened to cut off the province’s power supply on Nov. 16 unless the National Power Corp. pays its debts to them.

Two private power firms that supply the main power needs of the Palawan mainland through the Palawan Electric Cooperative said they would be constrained to shut down their facilities next week because of huge losses they incurred as a result of the Napocor failure to pay over P200 million in debts.

Napocor owes Palawan Power Generation Inc. and Delta P, Palawan’s two main power suppliers, at least P120 million each.

The government subsidizes electricity payments in isolated island grids like Palawan.

The province’s two main power suppliers have written Napocor last Nov. 3 informing it of their intention to cut off electricity in Palawan by Nov. 16.

The two independent power companies supply over 70 percent of Palawan’s power needs, raising apprehension especially from the business sector on the economic impact of a shutdown.

“A reduction in energy supply of the magnitude suggested would be catastrophic for the Palawan economy,” said the Palawan Chamber of Commerce and Palawan Filipino Chinese Chamber of Commerce in a letter addressed to Froilan Tampinco, Napocor president.

The letter said while businesses in Palawan do not consume as much electricity as do businesses in highly urbanized areas, they are “highly dependent on a reliable electric supply to sustain economic activities.”

The business groups also urged officials of Palawan to find ways to resolve the impasse between Napocor and the IPPs.

Napocor continued to carry the burden of finding ways to meet its obligations, as its liability to fuel suppliers and power producers have gone way beyond its capacity to collect enough subsidized fees to pay off its debts.

Palawan stakeholders maintained that while Palawan is the source of natural gas that powers one-third of Luzon’s electric energy needs, the province still finds itself struggling with the national government’s inability to resolve the subsidy problem.

Some lawmakers have proposed the application of royalty from the Malampaya fund to cover the island grid subsidies.