March 22, 2018 | 12:13 am
THE municipality of Pagbilao in
Quezon province revoked the cease and desist order (CDO) it issued against Pagbilao
Energy Corp. (PEC), resulting in the dismissal of the case between the Aboitiz
Power Corp. (AboitizPower) unit and the town officials.
“The revocation of the CDO means
that PEC is not barred from proceeding with the scheduled commercial operations
of its power plant,” the listed power generation and distribution company told
the stock exchange on Wednesday.
The municipality canceled its order
on March 7, 2018. In a hearing on the same date, officials of Pagbilao and PEC
moved for the dismissal of the case, which the court granted.
Based on data from the Department of
Energy (DoE), PEC’s 420-megawatt (MW) coal-fired power plant project had
undergone testing and commissioning in August 2017. It was scheduled to start
commercial operation in January 2018.
“PEC is working with the
Municipality of Pagbilao for the issuance of its business permit, and also on
the few remaining steps necessary before the start of the PEC plant’s
commercial operations,” AboitizPower said.
The PEC plant is one of several
scheduled to go online this year. The DoE is banking on the facility’s capacity
to answer the expected increase in power demand this summer, thus preventing
the occurrence of “yellow alerts” or situations where power reserves have thinned,
usually a precursor to a power interruption.
Pagbilao officials issued the CDO as
the company was applying for a business permit for calendar year 2018.
AboitizPower said the municipality
required PEC to execute a memorandum of agreement (MoA) implementing its
corporate social responsibility programs for an amount above the company’s
approved budget.
AboitizPower said the municipality
refused to issue the business permit without the executed memorandum, and
instead issued the CDO against the operations of the company’s power plant in
Pagbilao.
PEC then filed the application for
injunction and obtained a temporary restraining order from Branch 57 of the
Regional Trial Court of Lucena City, preventing the municipality from
implementing what the company believes to be an unwarranted CDO.
PEC maintained the execution of the
MoA is not part of the published and legal requirements for a local business
permit.
The listed company said the PEC
plant had received all the required endorsements from the local government
units, namely: the Quezon provincial government, the municipality of Pagbilao,
and the host barangay of Ibabang Polo.
It added all clearances and
endorsements from national government agencies, such as the Department of
Energy, and the Department of Environment and Natural Resources, among others,
had been secured.
PEC is a joint venture company
between Therma Power, Inc. and TPEC Holdings Corp. Therma Power, a wholly owned
subsidiary of AboitizPower, is the holding company of its investments in
non-renewable energy.
AboitizPower said the potential
delay in the commercial operations of PEC’s power plant would render it unable
to perform its commitments to its suppliers, customers, and to the Luzon grid.
— Victor V. Saulon
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