Napocor readies award of P6.27-B SPUG fuel supply contract

Business World Online
Posted on January 09, 2012 10:15:37 PM

THE NATIONAL Power Corp. (Napocor) is moving towards sealing a fuel order contract meant to supply off-grid power plants and barges this year, with bids now on their way to the awards committee, an official said.
Submitted bids from unidentified petroleum firms were opened late last month for the P6.27-billion contract as scheduled under a Dec. 9 document, Napocor Spokesman Dennis S. Gana said.

“Bids are for presentation to the bids and awards committee of SPUG,” Mr. Gana said in a text message to BusinessWorld, signaling that the auction has not failed.

This, even as Napocor has warned it may not be able to cover all SPUG areas this year under the P15-billion budget approved by Congress, which is lower than the P19-billion the state corporation had requested.

Suppliers last year had run into trouble after Napocor ran out of funds, prompting petroleum firms to stop giving SPUG areas fuel on a credit basis.

The affected facilities in particular were Casiguran diesel power plant in Aurora, Cuyo diesel power plant in Palawan, power barge 108 in Tawi-Tawi and the Camotes diesel power plant in Cebu.

Pilipinas Shell Petroleum Corp., Petron Corp. and Filpride Resources, Inc. had won the contract last year.

Senate has since then approved a P6.393-billion supplemental budget for Napocor in a resolution that was immediately transmitted to Malacanang for approval.

The winner of the new contract will provide fuel oil to “existing plants, mini-grid and new areas,” the document read.

Earlier, Napocor had already auctioned off a P2.195 billion contract to meet SPUG fuel requirements in the latter half of 2011.

Napocor through SPUG manages and operates 157 power utilities in off-grid areas with a combined capacity of 200 megawatts (MW).

Two areas, Masbate and Bantayan Island already source power from private firms running generators in the area.

These two areas are not included in the beneificaries which will receive fuel from the winning bidder.

Napocor is planning to hasten privatization of SPUG areas so private firms will handle the supply of fuel and the operations of power plants.

Recently, the Energy Regulatory Commission (ERC) allowed the state agency to collect form users an additional P4.1 billion in recoveries for SPUG areas to cover deferred costs.

Electricity rates in off-grid areas will increase by P1.43 per kilowatt-hour (kWh) which means consumers who consume 100 kWh will see an increase of P143 in their January billing.

SPUG areas are in Mindoro, Batangas, Marinduque, Quezon, Palawan, Catanduanes, Albay, Romblon, Batanes, Cagayan, Aurora, Apayao, Kalinga, Isabela, Camarines Sur, Masbate, Cebu, Siquijor, Antique, Iloilo, Leyte, Biliran, Samar, Basilan, Sulu, Dinagat, Sulatan Kudarat, Davao, Surigao del Norte, Zamboanga and Tawi-Tawi.