Cebu power firm extends to July 25 notice of freeze

Cebu Private Power Corp. (CPPC) has agreed to extend to July 25 its notice of suspension of operations from the earlier notice of June 15, 2003, Energy Secretary Vincent Perez said.

"We are relieved that CPPC has heeded the public’s call to extend its notice of suspension to allow time for the regulatory process to arrive at a viable and long-term solution to the Cebu power situation," Perez said.

CPPC informed Perez in a June 13 letter that it has decided to continue its operations despite huge losses, in response to the request of the Department of Energy (DOE) and of various business groups in Cebu, particularly the Cebu Chamber of Commerce and Industry, Cebu Furniture Industry Foundation, Regional Chamber of Commerce and Industry and the Mandaue Chamber of Commerce and Industry.

"I am thankful that CPPC has shown great concern for the public interest and is acting as an exemplary corporate citizen. They have heeded the appeal of the private and the public sectors not to suspend operations on June 15 and instead continue to supply power to the Visayans, allowing time for their issues to be resolved," Perez said.

The DOE, along with different agencies and other stakeholders, have appealed to CPPC not to cease operations by shutting down its power plants, as this would have a significant adverse impact on Visayas Electric Cooperative consumers as well as the rest of the Cebu-Negros-Panay grid. CPPC is currently supplying 62-megawatts (MW) of electricity to VECO under a 15-year build-operate-transfer (BOT) contract.

Perez said the extension will pave the way for the regulatory process to continue. This as the Energy Regulatory Commission (ERC) has recently conducted a public consultation on the rate schedule in the Visayas grid, which is considered relatively low to allow private sector to invest and keep operations viable and sustainable.

Under its power supply contract, CPPC’s electricity selling price to VECO is pegged on the National Power Corp.’s pricing schedule.

The energy chief assured that the DOE, together with the other government agencies and the power firms, will continue to work closely in addressing the issues surrounding CPPC and at the same time the looming power supply shortage in Cebu by end of the year.

"Even if the CPPC situation is resolved it provides us only with a near-term relief. We still anticipate some shortages come December 2003 and that is anticipated to further deteriorate early next year. We will be working closely with all the parties in addressing these issues. However, let me assure everyone that all possible efforts are being exerted and there is still time to address the situation," Perez said.

The DOE has been conducting series of dialogues in the Visayas to avert future power supply problems. The DOE is also in discussions with several foreign power firms to put additional generating capacity in the region. However, these initiatives will take some time and the current rates still remain an issue to these potential investors.

Perez has also ordered the National Transmission Corp. (Transco) fast track the completion of the $36-million Negros-Panay submarine interconnection project and the $68.3-million Cebu-Negros interconnection.