Napocor dumps Indian partner as Catanduanes stayed dark

Business Mirror
11 Jul 2014 Written by Lenie Lectura

THE National Power Corp. (Napocor) on Friday said it has replaced Cost Plus, the Indian firm that it contracted to provide 2.6 megawatts (MW) of additional capacity for Catanduanes, in a bid to address the power outages in the province.

Among others, Cost Plus was earlier blamed for the 20-hour daily brownout because of the frequent malfunction of its generating sets (gensets), First Catanduanes Electric Cooperative (Ficelco) Engr. Samuel V. Laynes said.

The Napocor said it has already awarded to Monark Equipment the contract for the new rental generating sets with an aggregate of 2.8 MW to replace Cost Plus gensets.

Catanduanes is one of the 14 First-Wave areas to embark on privatization by virtue of an order by the Department of Energy (DOE). That order, DOE Circular 2004-01-001, prescribe the rules for private sector participation in existing Small Power Utilities Group (SPUG) areas. Based on the circular, electric coops may conduct a competitive selection process to secure a new power provider that will take over the generation function of the Napocor-SPUG.

Also, the power state-firm bid out three new 1-MW gensets earlier this year for the Marinawa Diesel Power Plant, which will be commissioned on the last quarter of 2014 to replace the rental gensets. Catanduanes has returned to its normal power situation on July 7 after the Catanduanes Power Generation Inc. (CPGI) has fully restored power. CPGI is the operator of the 3.6-MW genset of Ficelco. Its sudden maintenance shutdown and the occasional breakdown of Napocor’s genset contractor, Cost Plus, on top of having insufficient water supply to run the hydro plants of Sunwest Water and Electric Co. Inc. (Suweco) have all caused the power shortage in the province.

The shortages prompted local public officials to declare a state of calamity for the province.

Laynes said he has asked the Napocor to end the deal with Cost Plus as early as April 29 as the Indian company failed to deliver on its contract.

He said it took the Napocor another two months to decide that there is a need to look for a new provider.

Laynes said the delay led to the serious power situation in Catanduanes every time the Cost Plus gensets stop operating.

He said that even if all the generating facilities are running, the actual total power output is only at 8.8 MW, which is short of the 9.3-MW requirement for the whole province. source