Despite the Department of Energy’s assurance of continued delivery of fuel for the diesel generators of Sunwest Water & Electric Co., fears remain that rotating brownouts could still occur by next month especially with the expiration of the Emergency Power Supply Agreement (EPSA) on May 15, 2026.
The emergency power deal inked between SUWECO and the First Catanduanes Electric Cooperative, Inc. (FICELCO) a year ago allowed the former to operate six gensets with a net dependable capacity of 5 megawatts to supply the demand in excess of its original 7.5 mW contract with the cooperative.
Based on the records, the EPSA gensets produced almost 1.2 mW of electricity in March 2026 and accounted for 18.77 percent of the total power production for the grid last month.
Under the agreement, SUWECO has only 16 days remaining from today, April 29, 2026, to operate the six gensets.
In a bit of good news, FICELCO has already posted its invitation for the qualified power suppliers to submit bids for EPSA 2 and three companies reportedly expressed their intention to join the negotiated bidding.
It is not known if SUWECO is among the three firms interested as there are reports that it will no longer bid for EPSA 2 allegedly due to its precarious financial situation.
Even if a new supplier is awarded the EPSA 2 contract, it will take some time for the company to actually start operations in Catanduanes.
According to an industry official, it normally takes six to eight weeks to set up and begin operating modular diesel generators but in extraordinary circumstances it could be done in two weeks.
Assuming that a new supplier is contracted to replace SUWECO’s EPSA 1 gensets, the DOE would have to make good on its vow to ensure the continued and reliable supply of electricity in the island.
It said in a press statement last week that the national government, through the DOE and in close coordination with the National Power Corporation (NPC), Philippine National Oil Company – Exploration Corporation (PNOC EC), and other concerned agencies, is actively facilitating the provision and delivery of fuel necessary to sustain the operations of SUWECO’s diesel power plants.
The DOE also said it is working to strengthen the long-term resilience of the province’s power system, through improved supply contracting, rehabilitation of existing facilities, and the timely completion of committed generation and transmission projects but did not provide details.
As early as April 13, SUWECO, through its lawyers, had already informed National Power Corporation (NPC) President and CEO Jericho Jonas B. Nograles of the urgent and critical fuel situation faced by the operations of its Marinawa diesel power plants.
It claimed that its available fuel supply was projected to last only until April 15 and that it will be constrained to suspend operations without immediate replenishment.
With its operations heavily dependent on subsidy being administered by NAPOCOR, the private company stressed that collections from the Universal Charge for Missionary Electrification (UCME) are no longer sufficient to offset the continuously increasing fuel costs, aggravated by the delays in the disbursement of subsidy funds to SUWECO.
The lawyers likewise cited the continued non-payment of about P475 million in retroactive subsidies, with the Energy Regulatory Commission still to issue a clear and final ruling on the case.
After securing an additional 300,000 liters of fuel on April 18, SUWECO informed FICELCO General Manager Engr. Francis A. Gianan that it would suspend operations of its diesel power plants on April 22 for the same reasons and sought the assistance of the cooperative on possible measures to address the situation and mitigate the risk of service disruption.
Copies of the April 21 letter were provided by SUWECO to Catanduanes Rep. Eulogio R. Rodriguez, DOE Secretary Sharon S. Garin, ERC Chairman Francis Saturnino C. Juan, the NAPOCOR president, and National Electrification Administration (NEA) Administrator Antonio Mariano C. Almeda.
This prompted the concerned officials, except the ERC chair, to consider the situation and implement necessary measures to avert the shutdown.
It was during the meeting that NPC agreed to release P65 million in subsidy payments to SUWECO, which subsequently issued a purchase order for 350,000 liters of diesel to its supplier, Unioil.
NPC also assured that the next UCME payment releases are being finalized and will be made available to help sustain plant operations in Catanduanes.
The meeting also considered the possibility that the PNOC supply the fuel requirements of SUWECO and other independent power utilities at a discounted price.
However, as far as Catanduanes is concerned, any agreement to this effect could be hindered by the fact that no one at SUWECO has been authorized by its board to sign any deal.
It is claimed that most of the board members are abroad after being included among those being investigated in connection with anomalous flood control projects.
There is also the matter of the existing contract between SUWECO and Unioil, whose deliveries are being hauled by local fuel dealer Powerzone Petroleum Products Corp.
Another potential sticking point is the issue of who will pay for the cost of delivering the fuel from PNOC which will be coursed through NPC.
Aside from the assurance of subsidy payments, the Zoom meeting also allowed GM Gianan to secure the tacit agreement of the DOE to grant UCME subsidy for the EPSA 2 power supply as to avoid another burden for consumers.
Under the existing procedure, NPC will apply with ERC for approval of a supplemental UCME subsidy, the estimated cost of which has already been submitted by FICELCO.