La Union Electric ends contract with Napocor

SAN FERNANDO CITY, La Union — The La Union Electric Company (LUECO), a private firm which supplies electricity to around 35,000 consumers in this city and in the neighboring towns of Bauang and San Juan, will not renew its contract with the National Power Corp. (NAPOCOR), which ends on June 25 this year.

LUECO said it has found a lower offer from a power firm which Napocor cannot match.

Jerry Parlan, LUECO operations manager, said in public hearing here that they had filed a petition to the Energy Regulatory Commission (ERC) in Manila to approve their electric power purchase agreement (EPPA) with Mirant Philippines, a US-based power supplier based in Sual, Pangasinan.

Parlan said Mirant has offered a four- centavo rate reduction per kilowatt hour. Aside from the rate reduction, Mirant has also assured LUECO of an efficient power supply in their coverage area.

NAPOCOR’s existing price for LUECO is around P4 per kilowatt hour.

Michael Lopez Jr., marketing officer of Napocor, admitted during the public hearing that they could not match the offer. "We cannot match the four-centavo rate reduction offered by Mirant. We will be losing income," he said.

If approved, the contract between Mirant and LUECO will be good for ten years and LUECO will be buying its entire power requirement from the US-based firm.

Santiago Malaka, Mirant assistant vice president, said hey would be selling to LUECO 218 megawatts of power. The Sual plant generates around 1,218 megawatts.

Parlan said the new contract will be beneficial to LUECO and its consumers. LUECO currently has the lowest rate among power firms in Luzon.