Alarmed by the power rate increases ranging from nine to 13 percent, a council of small businesses in Catanduanes is set to appeal to concerned national agencies to fast-track approval of the local cooperative’s terms for its Competitive Selection Process (CSP) for a new power supplier.
The move of the Provincial Micro, Small, and Medium Enterprise Development Council (PSMSMEDC) came last June 24, 2025 during its meeting at the Provincial Capitol where it invited the First Catanduanes Electric Cooperative, Inc. (FICELCO) to explain the rationale and details behind the power rate adjustments it announced last month.
The co-op representative stated that its existing supply contracts with Sunwest Water & Electric Co. (SUWECO) and the National Power Corporation (NPC) is “considerably insufficient” to meet the abrup increase in electricity demand in the province.
In addition, FICELCO’s conduct of a Competitive Selection Process (CSP) to secure a long-term and least-cost power supply has been delayed as it is still awaiting approval of the Terms of Reference (TOR) and other documents at the National Electrification Administration (NEA).
“Given the supply shortfall and uncertainty of CSP timeline and SUWECO’s scale-down in operation in their diesel gensets , FICELCO has no choice but to procure power through Emergency Power Supply Agrement (EPSA) to avoid rotational load shedding, maintain system reliability and ensure service continuity,” the cooperative declared.
It will remain effective for one (1) year or until the New Power Provider (NPP), selected through CSP, becomes commercially operational, whichever comes first, it added.
Based on the simulation for the June 2025 billing period, 85 percent of the energy input of 8.9 million kilowatt-hours for the month was supplied by SUWECO.
Prior to the emergency power supply deal, the subsidized generation rates for the energy mix were as follows: NPC Main, P7.39/kWh; NPC Palumbanes, P6.552/kWh; SUWECO Hydro, P5.4148/kWh; SUWECO Marinawa DPP, P7.39/kWh; SUWECO Viga DPP, P7.39/kWH.
For the June 2025 billing, the EPSA accounted for 515,300 kWh or 5.74 percent of the total electricity produced in the grid, at the True Cost Generation Rate (TCGR) of P22.951/kWh.
Using the blended rate, the cost of electricity for residential users in Virac rose from the previous P13.2962/kWh to P14.5236, or an increase of 9 percent.
The rates for other users are as follows: Commercial, P10.892/kWh (+13%); Public Building, P10.8566/kWh (+13%); and Streetlights, P11.8769/kWh (+12%).
For Virac residents and business establishments with an average of 100kWH consumption, this translates to an increase of P122 per month, FICELCO said.
However, the rate impact may decrease or increase depending on the actual production of hydro and diesel power plants, and on the total system demand.
FICELCO management actually began considering entering into an emergency power deal as early as September 2024 when SUWECO announced that it would scale down its operations after NPC refused to pay nearly P300 million in subsidies, resulting to financial strain and deficits in its cash flow.
NPC said SUWECO has been declared ineligible for the subsidies after the Energy Regulatory Commission (ERC) in a January 2024 ruling said that the process leading to the 2nd Amendment to the Electricity Supply Agreement (ESA) between FICELCO and the private supplier was not compliant with existing rules.
Beginning in October 2024, the cooperative started implementing daily rotating brownouts ranging from one to two-and-a-half hours, forcing it to resort to the EPSA.
Pursuant to Department of Energy (DOE) Circular No. DC2023-06-0021, an EPSA can be implemented immediately, but electric cooperatives (ECs) undergoing this agreement will receive no subsidy, with their customers to pay the True Cost of Generation Rate (TCGR).
It is claimed that the situation would not have occurred had the cooperative’s bid for a new power supplier encountered delays.
According to the Power Supply Procurement Plan for 2021-2030 that FICELCO submitted for approval to the DOE, the peak demand for electricity in the island was forecast at 18 MW for 2023, 19 MW for 2024 and 22 MW for 2025, rising to 25 MW by 2030.
The cooperative expected the CSP to be completed by October 2021, with the new power provider to start commercial operation of 15 megawatts by March 2023.
The PSPP stated that this would have the effect of limiting SUWECO’s dispatchable capacity to 7.975 MW based on the original ESA that would end in 2040.
But the original schedule was scuttled by the delay in the approval of the Terms of Reference of the CSP by the NEA.
Under NEA Memorandum No. 003-17, all electric cooperatives conducting CSP of their power supply agreement shall submit the terms of reference (TOR) of their procurement for NEA’s review and approval prior to the publication/posting of their Invitation To Bid.
Prior to the execution/signing of the power supply agreement, the cooperative shall also submit a copy of the unsigned PSA for review by NEA, which would not endorse the PSA to the DOE if all the requirements are not met.
It is likewise alleged that the TOR has underwent 16 revisions since it was submitted to NEA, with disagreements among technical personnel of NPC likewise hindering finalization of the TOR.
The source said it is likely that another EPSA would be signed after a year once the current deal expires as the CSP would take time, particularly with SUWECO’s unpaid subsidy billings ballooning to over half a billion pesos as of June 2025,