City panics with new blackout threat
Iloilo City Mayor Jerry Treņas is now in a quandary following the recent pronouncement of Shell Philippines that it would no longer supply bunker fuel to Panay Power Corporation (PPC)-Mirant Global Phils. if it continues to fail paying its obligations amounting to about P600 million by January 19, 2006.
A source told The News Today that Treņas would meet with the business sector today, Friday, to seek their help in trying to avert the impending power blackout in the city.
Treņas is much more worried as the Dinagyang Festival, the city's biggest annual celebration, draws near.
PPC-Mirant, which operates a 72 megawatt diesel plant in Bo. Obrero, Lapuz, is the only supplier of power to the city's sole power distributor Panay Electric Company (Peco).
Middle of December last year Energy Secretary Raphael Lotilla assured Treņas that no power shutdown would occur in Iloilo City.
However, the mayor was surprised when Lotilla called him middle of this week informing him of the bad news.
Quoting Lotilla, Treņas said Shell Philippines warned that they would supply fuel to PPC only until January 19 as the latter's debt already reached around P600 million. After which, Shell would provide PPC bunker fuel on cash basis.
PPC-Mirant plant department manager Noli Simpas, who together with other PPC officials met with Treņas last week, declared that their reserve fuel would only last until January 23. If not timely addressed, January 23 would be the last day for Iloilo City to have electric power.
Incidentally, January 19 is also the schedule of the Energy Regulatory Commission (ERC) hearing on Peco's petition to increase rates in Cebu City.
In December last year PPC-Mirant threatened to shutdown its plant by December 15 but was averted when Shell supplied them additional fuel.
ERC on December 14, 2005 granted Peco temporary provisional authority to collect generation rates at 6.5121 per kWh. The provisional authority was deemed to address the financial setbacks incurred by PPC as a result of the rate reduction implemented by Peco in September this year.
In the provisional authority Peco was also ordered to make ways in order to source some of its power requirements from the Cebu Negros Panay Grid of the National Power Corporation (Napocor).
But Peco lawyer Hans Sayno said connecting with Napocor is easier said than done. He said transmission lines still have to be put up thus it would take some time. Besides, Sayno said Napocor could not guarantee that it could supply the power needs of the city.
Iloilo City alone needs an average of 78 megawatts of power.
NPC's 24 megawatt Power Barge 101 from Mactan, Cebu would be brought to Iloilo City but it is still not enough to supply the city's power needs.
Treņas admitted that the looming power problem is a very serious matter and that he would again seek the help of Pres. Gloria Macapagal-Arroyo to save the city from power blackout. He said he had already coordinated with one of the president's advisers Gabriel Claudio for his plan to meet with Pres. Arroyo.
The News Today gathered that the power problem does not only apply to Iloilo City. Transco earlier warned the power supply situation in Panay remains critical because the area does not have an indigenous source of power.
Depending mainly on power generated by NPC, Panay residents currently suffer from rotating brownouts of three to six hours a day.
Panay imports all its power requirements from Negros and parts of Cebu.