Will ERC grant Peco's petition to amend PPA?
Iloilo City -- The two protagonists in the dispute regarding the proposed amendment of the power purchase agreement (PPA) of Panay Electric Company (Peco) and Panay Power Corporation (PPC) are both hoping a favorable decision from the Energy Regulatory Commission (ERC).
While, consumers' representative Atty. Romeo Gerochi, chair of the Freedom from Debt Coalition (FDC), is confident that the ERC will not grant Peco's petition to amend its existing PPA, lawyer Honorato Sayno of Peco thinks otherwise.
Sayno believes ERC will grant their petition considering the financial setback being faced PPC which threatens its operation.
PPC earlier warned to shut down their 72-megawatt diesel power plant in Brgy. Ingore, La Paz as they could no longer sustain its operation because of a very minimum generation rate imposed by ERC.
PPC is the sole supplier of power to Peco.
ERC concluded its series of hearings on the petition last week in Cebu City.
Gerochi, for his part, believes ERC will not grant the petition because there is no legal basis to have their existing PPA amended.
"There is no change of situation," Gerochi said.
"If they use as reason the increasing cost of fuel, it can be automatically handled by the Generation Rate Adjustment Mechanism (Gram)," the lawyer added.
Gram is a mechanism provided by ERC to protect independent power producers from the fluctuating cost of fuel.
Gerochi said in ten days he will be submitting his draft decision as ordered by the ERC. He said in his draft decision he will include his demand for Peco to immediately comply with ERC order in its recent provisional authority to connect with the Cebu-Negros-Panay grid.
Gerochi also assailed Mayor Jerry Treņas for issuing earlier statements which are contradictory to the pronouncements given by PPC-Mirant Vice President Armand Lapus in last week's hearing.
Gerochi said Lapus denied that they threatened of a power shutdown after January 19, that Shell Philippines refused to deliver fuel to them, and that NPC guaranteed PPC's debt with Shell Philippines during last December's power crisis.
Gerochi further said that it appears that if Peco's PPA is amended they would already charge the city's power consumers a whopping P10.50 per kilowatthour.
"If that happens then all of us will suffer," said Gerochi.
City Legal Officer Edgar Gil and Councilor Jed Mabilog represented the city government in ERC's last hearing on the petition held in Cebu City. However the two city officials merely acted as observers in the whole day hearing.