“Very unstable” power by summer:

FICELCO scrambles to counter NPC’s non-renewal of power deal

Warning of “very unstable” power situation this summer, the First Catanduanes Electric Cooperative, Inc. (FICELCO) scrambled to seek the support of local officials following the decision of the National Power Corporation (NPC) not to renew its Power Supply Agreement (PSA) with the cooperative.

Last week, General Manager Engr. Raul Zafe sent out letters to the Sangguniang Panlalawigan and the 11 Sangguniang Bayans, as well as Acting Governor Shirley Abundo and municipal mayors asking them to help convince NPC to change its mind.

A separate appeal for assistance has also been sent to Congressman Hector Sanchez, who is vice chairman of the House Committee on Energy, and Senator Sherwin Gatchalian, chairman of the Senate Committee on Energy.

In an interview last week, GM Zafe told the Tribune that on Nov. 9, 2019, the FICELCO Board of Directors headed by President Rodolfo Vargas Sr. passed a resolution extending the agreement with NPC for another three (3) years and/or until such time that a New Power Provider (NPP) is determined through a Competitive Selection Process (CSP), whichever comes first.

The supply contract was supposed to expire this coming April 27, 2020, with the board reasoning that the entry of a new supplier to take over NPC’s role would take considerable time in view of the lengthy process, thus the need to sustain NPC’s contract to avoid a power crisis in the province.

Last Jan. 20, 2020, however, Rene Barruela, NPC Vice President for the Corporate Affairs Group, informed GM Zafe that NPC will no longer extend the PSA with FICELCO for Catanduanes and encouraged the cooperative to expedite the conduct of CSP for the remaining power requirement of the province.

“In the event that the PSA expires and FICELCO was not able to complete the CSP, please be advised that there are other options in DOE Circular 2018-02-0003 that may be adopted by FICELCO,” Barruela said.

In his reply to the NPC official, a copy of which was obtained by the Tribune, GM Zafe said that while the cooperative respects NPC’s decision, “we are now faced with the possible power shortage during the dry season that usually extends until the month of September.”

He pointed out that for this year, the forecast peak demand will reach 14.55 megawatts and, in fact, in this colder month of January, the peak demand is already 10.65MW.

“If NPC’s PSA with FICELCO will not be extended and low water level occurs during the dry season affecting the operation of hydropower plants, power shortage in the coverage area will be experienced, resulting once again to the implementation of rotational brownouts or load shedding,” GM Zafe stressed.

He informed VP Barruela that the cooperative has already proceeded with the initial stage of the CSP in anticipation of the expiration of the NPC deal and that FICELCO has asked the Department of Energy (DOE) for exemption from the conduct of the CSP.

The GM recalled that NPC’s mandate under the Electric Power Industry Reform Act (EPIRA) for the Missionary Electrification Program is to supply the power requirements under Small Power Utilities Group (SPUG) areas until such time a Power Supply Agreement for a new power provider is approved and implemented.

“The only option that FICELCO is bound to adopt now is Section 2.2.3 of the CSP Policy which clearly states that ‘provision of power supply by any mandated Government-Owned and Controlled Corporation (GOCC) for off-grid areas prior to and until the entry of New Power Provider (NPP) in the area,’” Zafe emphasized in his appeal on behalf of 51,744 member-consumer-owners in Catanduanes.

The FICELCO board has likewise passed a resolution earnestly appealing to the state power firm to reconsider its decision and allow for an extension of the PSA until such time that the co-op’s CSP is completed.

In a phone interview, Cong. Sanchez disclosed that upon being apprised of the NPC decision, he immediately sought an audience last Jan. 27 with NPC President Pio Benavidez Jr., who hails from Bato, to discuss the matter as well as follow up the progress of its 69-KV transmission line project.

He said Benavidez confirmed that NPC will not extend its supply agreement with FICELCO but it will not pull out of the Catanduanes Grid as reported in some quarters.

The solon said the NPC president told him that renewal of the contract would be a violation of DOE Circular 2018-02-0003, with which other cooperatives in provinces like Masbate, Marinduque, and Mindoro have already complied.

“Hindi ko maintindihan kung bakit hindi ito magawa ng FICELCO,” Benavidez reportedly wondered, noting that as of now the generating capacity in the island grid is 19MW, which is greater than the peak load of 12MW.

The congressman said the NPC chief informed that it will not pull out the gensets and in fact, two 5-MW power barges are on standby in the Visayas to be deployed here in case of a power crisis.

Rep. Sanchez bared that Benavidez will anticipate any power deficiency but will wait for the cooperative to submit its Power Development Plan.

Meanwhile, Acting Vice Governor Lorenzo Templonuevo Jr. told the Tribune that the issue has been referred to the office of Provincial Board Member Natalio Popa Jr., the vice chairman of the Committee on Energy, as the chairman, PBM Edwin Tanael, is still recuperating from a heart problem at a Manila hospital.

Templonuevo assured support for FICELCO’s move through an urgent resolution set to be passed during its regular session last Monday, Feb. 10, 2020.

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