Power rates in Catanduanes could drop to previous levels once the National Power Corporation (NPC) and Sunwest Water & Electricity Co. (SUWECO) comply with the ‘favorable’ ruling of the Energy Regulatory Commission on the latter’s claim for over P500 million in subsidy collectibles.
This was indicated by an official of the First Catanduanes Electric Cooperative, Inc. (FICELCO) to the Tribune last week following the ERC’s latest order on the motion for clarification filed by NPC four months earlier.
It may be recalled that in January 2024, the ERC dismissed the Joint Application filed by SUWECO and the cooperative for the approval of the 2nd Amendment to their Electricity Supply Agreement (ESA), on the ground that the amendment did not adhere to existing guidelines of the Department of Energy (DOE) mandated Competitive Selection Process (CSP) supposed to govern procurement of additional capacity for on-grid and off-grid cooperatives.
Citing the ERC’s ruling that any implementation of the 2nd Amendment would be considered an ineligible supply contract, NPC deferred the payment of subsidy billings for SUWECO’s Marinawa 1 and Viga diesel power plants, placing the private supplier in a precarious financial position and forcing it to scale down its operations.
This and ERC’s subsequent denial of the motion for reconsideration led to the signing of an Emergency Power Supply Agreement (EPSA) between the company and FICELCO that led to the steep increase in power rated in Catanduanes from the previous P13 per kilowatt-hours to over P17 per kWh starting last June 2025.
The NPC also sought clarification from ERC on several issues, including SUWECO’s entitlement to the Universal Charge for Missionary Electrification (UC-ME) subsidy of the energy delivered in excess of the approved capacity of 7.975 megawatts under the contract between the private supplier and the cooperative.
Adverse reaction from consumers over the EPSA that increases monthly power bills by over 60 percent prompted Governor Patrick Alain T. Azanza, the Sangguniang Panlalawigan and business groups to separately lobby the ERC, NPC. National Electrification Administration (NEA) and Department of Energy (DOE) for prompt and appropriate action on the NPC’s motion, the cooperative’s pending approval of the Terms of Reference (TOR) for its long-delayed Competitive Selection Process (CSP) and SUWECO’s subsidy collectibles.
Azanza particularly focused on the ERC, whose Chairman Atty. Francis Saturnino Juan is a fellow UP Law alumni, with the Commission fast-tracking the hearing on NPC’s motion for clarification.
In its Sept. 17, 2025 deliberations, the ERC ruled that SUWECO is entitled to the UC-ME subsidy for the energy delivered in excess of the approved 7.975 MW capacity, with the rates to be used as basis that whichever is lower between the actual rate and the NPC rate.
It also granted NPC’s request that the Hourly Dispatch Loading Report be the basis in determining the energy delivered in excess of the approved capacity, instead of the amount of annual energy delivered.
SUWECO had claimed that it was entitled to an annual energy equivalent of 69.699 gigawatt-hours (GWh) based on the total 12.975 MW capacity of its five power plants.
However, the ERC underscored that SUWECO’s claimed annual energy included that of the Capipian Mini-Hydro Plant and Hitoma 02 MHP, both of which are not operational as of today.
It ruled that with both non-existing plants having a combined capacity of 4.175 MW, the capacities from the Solong Diesel Power Plant and the Marinawa DPP with a total of 3.8 MW are intended to cover the supply from the non-operational MHPs.
The Commission likewise stated that the energy delivered by both DPPs should be included in the computation of the approved original capacity of 7.975 MW and that the equivalent energy of the Solong and Hitoma 01 MHPs be considered in times when the energy dispatched is purely from the diesel power plants.
In conclusion, the ERC directed NPC to validate and confirm that the subsidy billing as submitted by SUWECO are in accordance with the Commission’s resolution on the matter.
It ordered FICELCO to dispatch its supplier for its power requirements, furnish NPC the necessary documents on the dispatch and energy delivered by SUWECO plants and submit an explanation regarding dispatch beyond the approved capacity.
According to a source at FICELCO headquarters, a meeting with NPC and SUWECO will be called soon once the latter submits its power billing for the month of October 2025, which should indicate if the generation rate has gone back to its previous pre-EPSA level.
The emergency power deal still pending approval with ERC has a pre-termination clause that allows both parties to terminate the agreement once the issues used as its basis are resolved.
Once the EPSA is terminated, the power rates for residential, commercial, public buildings and streetlight users will likely revert to around P13 per kWh, it is claimed.
The cooperative management is reportedly preparing rate simulations in preparation for the possible termination of the EPSA.