By Lenie Lectura - January 7, 2019
The Energy Regulatory Commission
(ERC) has approved a capital expenditure (capex) spending of P1.082 billion
from 2017 to 2021 for beleaguered Palawan Electric Cooperative (Paleco).
The amount is lower than Paleco’s
application of P1.161 billion, intended for spending for 29 proposed
projects. Only four projects were disapproved by the ERC.
“The application filed by Paleco for
approval of its capital projects for the years 2017 to 2021 and for authority
to secure loan, with prayer for provisional authority, is hereby resolved,” the
ERC said in its November 6 decision, which was posted only last month.
The ERC authorized Paleco to secure
a P263.70-million loan to finance its capex.
“Based on Paleco’s application, its
average annual capex is approximately P129 million. Based on the simulation
conducted by the Commission, Paleco must require an approximate loan of P295
million to maintain a revolving fund of approximately P38.7 million by the end
of the implementation period. However, Paleco proposed a lower loan
amount of P263,708,768.67. Therefore, the Commission approved the authority to
secure a loan by Paleco in the amount of P263,708,768.67, as proposed,” the ERC
said.
Paleco intended to avail itself of the
loans from the National Electrification Administration (NEA) to
finance several of its proposed capex projects. The proposed loan amount is
payable within 15 years with an annual interest rate of 6 percent.
Paleco expressed concern about
NEA’s move to appoint an acting general manager to oversee the power utility’s
operations.
NEA Administrator Edgardo
Masongsong earlier designated engineer Nelson Lalas as Project Supervisor and
Acting General Manager of Paleco. Lalas was tasked to manage the day-to-day
operations of Paleco and to ensure the efficient delivery of electric service
to its member-consumer-owners (MCOs).
“Despite its status as an electric
cooperative registered with the Cooperative Development Authority, the NEA will
not stand idly by. We will exercise the agency’s inherent jurisdiction over
Paleco, as it has the technical capability to turn things around in Palawan and
for Palawan member-consumer-owners,” Masongsong said.
This was after President Duterte
last November 10 expressed his disappointment over the worsening power-supply
problem in Palawan, and warned Paleco of government takeover if frequent
service interruptions in the province were not solved by the end of the year.
In its position paper, Paleco
outlined a range of issues in providing reliable electricity service to its
MCOs, which include the delay in the approval of its capex application by the
ERC. Paleco is proposing to install substations in strategic places in Puerto
Princesa City and in the southern part of Palawan, as well as to put up a
Supervisory Control and Data Acquisition System in a bid to improve its
power-supply reliability in the province.
Another concern of Paleco was the
construction of transmission lines of the National Power Corp. and upgrading
its substations to augment its existing capacities.
Paleco also cited delays in the
processing and issuance of necessary permits like the environmental compliance
certificates, and electrical permits from the local government.
Also, it blamed the road-widening
projects of the Department of Public Works and Highways. Paleco’s operations
were greatly affected due to the need for the relocation of affected poles,
which in turn resulted into a series of power interruptions.
Moreover, the local power utility
also sought the national government’s assistance to get Palawan’s rightful
share in the Malampaya project to accelerate the electrification projects in
the province.
Paleco is the lone power distributor
of Puerto Princesa City and 18 municipalities, serving 137,277 consumers as of
June 2018.
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