NPC subsidy to ensure low rate despite takeover
The National Power Corp. (NPC) will continue to subsidize electricity generated by power plants in Panay set to be turned over to a Singaporean-owned firm this month to prevent a possible power shortage on the island.
The Napocor will supply fuel at a subsidized rate to the SPC Island Power Corp. (SIPC), formerly the Salcon Power Corp., for the operation of the Panay Power Diesel Plant (PPDP) 1 and PPDP 2 starting March 26.
Iloilo Rep. Arthur Defensor said this was the agreement reached during an emergency meeting in Malacañang on Wednesday to avert the disruption of power generation from the plants resulting to a power shortage.
The meeting with Executive Secretary Eduardo Ermita was joined by Defensor, Energy Secretary Angelo Reyes, Iloilo City Mayor Jerry Treñas, Presidential Assistant for Western Visayas Raul Banias and officials of SIPC, Napocor, and Power Sector Assets and Liabilities Management Corp. and the Energy Regulatory Commission.
Defensor said in a telephone interview on Thursday that the SIPC will charge electric cooperatives in Panay and Guimaras the current Napocor rates.
This set up will be implemented until the Visayas Supply Auction Program (VSAAP) of the Department of Energy and the Philippine Electricity Market Corporation (PEMC) will be put in place.
The VSAAP involves the tapping of privately owned power generators who will voluntary sell their excess power supply to the Visayas grid.
Banias said in a separate telephone interview that the Napocor subsidy will also take effect until a new power supply agreement will be reach by SIPC and electric distributors on the island and until the ERC approves new power rates.
Defensor said that when the VSAAP is in place and additional power supply is available, the SIPC will shut down its power plants to implement repair and rehabilitation work.
Defensor said that consumers should expect electricity rates to be higher than the current subsidized rate of the Napocor when the power plants are privatized.
Western Visayas officials and consumer groups have earlier called for the deferment of the transfer of the plants to SIPC over concerns that this will aggravate the power shortage in the region or result to higher power rates.
The two power plants in Panay with a total capacity of 146.5 megawatts and a dependable capacity of 103 mw were acquired by SIPC for US$ 5.86 million in November last year in a package that included 22-mw diesel power plants in Bohol.
The two power account for the bulk of the 121 mw power generated on the island. The Napocor is currently supplying the bulk of the supply needs of the seven electric cooperatives in Antique, Aklan, Capiz, Guimaras and Iloilo.