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Friday, November 25, 2005
No shutdown of power supply; blackouts averted
CEBU CITY -- Brownouts in Cebu were averted after the Cebu Private Power Corp. and the Visayan Electric Co. (Veco) reached an agreement that guarantees no shutdown of power supply.
How long the deal will hold will depend on the negotiations on the terms of the supply contract between the independent power producer and Veco.
Cebu Governor Gwendolyn Garcia called for an emergency meeting with CPPC and Veco officials Thursday night at the Capitol during which the agreement was reached.
"Both Veco and CPPC decided that public interest far outweighs other considerations. They showed that they too are united with us. We appealed to them to let the greater good prevail," Garcia said in a phone interview after the meeting.
Cebu faced low-voltage problems and rotating brownouts after CPPC warned that it would stop supplying 62 megawatts to Veco starting Saturday, after negotiations to renew its contract with the power distributor bogged down.
The warning came at a time when Cebu is hosting the Southeast Asian Games and the Christmas holidays drawing near.
CPPC's interim agreement with Veco that allowed it to charge higher rates for its supply expired Thursday. The interim agreement signed in 2003 has been extended twice.
Veco lawyer Jess Anthony Garcia said the agreement the governor brokered yesterday should not prejudice their lawsuit against CPPC, which seeks to compel the power producer to honor its Feb. 7, 1997 power purchase agreement with Veco.
Under that deal, CPPC can only charge Veco two percent less than what the state-owned National Power Corp. (Napocor) collects per kilowatt-hour.
CPPC supply accounts for 23 percent of Veco's needs. Veco serves about 225,000 households and more than 22,000 businesses in Metro Cebu.
Napocor and the National Transmission Corp. (Transco) said Thursday that they can provide Cebu with at least 120 megawatts should Veco lose one of its suppliers.
Napocor president Cyril Delcallar said they are prepared to activate their Naga and Negros power plants anytime, but they want to find out first who will pay for the additional supply.
The plant in Negros can provide Cebu with a minimum of 40 megawatts, while the plant in Naga, Cebu can generate at least 20 to 30 megawatts.
In phone interviews Thursday, Energy Regulatory Commission (ERC), Napocor and Transco officials said they are negotiating on a quadripartite arrangement between CPPC, Veco, Napocor and Transco.
Under the arrangement, all four entities will take part in supplying electricity to Cebu, with CPPC, allowing Napocor and Transco to assume at least 30 megawatts of the 62 megawatts it will stop supplying to Veco, ERC chairman Rodolfo Albano said.
"There's more than enough supply, it's just a matter of timing. The draft is ready, we're just finalizing everything," Transco president Alan Ortiz said.
Delcallar said they will have to coordinate with Veco first to make sure they can address the technical concerns and if Veco's power lines will be able to accommodate the additional power that will be supplied.
Meanwhile, the ERC will begin mediation talks between CPPC and Veco this morning after hearing Cebu City Mayor Tomas Osmeña's intention to be the intervening party.
Albano said they cannot just meddle in the issue without a petition for them to mediate coming from either the public or private sector.
Cebu City Councilor Sylvan Jakosalem told Sun.Star Cebu last night that they will hold an executive session with CPPC and Veco officials Friday.
Cebu Chamber of Commerce and Industry president Robert Go said he will attend the executive session.
Governor Garcia also set another meeting next Wednesday with CPPC and Veco, but this time with Napocor, Transco officials.
She said the deal Thursday night was reached after about 45 minutes of negotiations between Veco's Al Aboitiz and Paul Hubahib and CPPC general manager Roger Lim.
Lawyer Joel Bontuyan of the ERC Visayas office also attended the meeting, which started at 5:45 p.m. (LCR/MBG/With EOB of Sun.Star Cebu/Sunnex)
(November 25, 2005 issue)
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