DOE finds violations in audit of Zamboanga power utility

Danessa Rivera (The Philippine Star) - May 25, 2019 - 12:00am

https://www.philstar.com/business/2019/05/25/1920592/doe-finds-violations-audit-zamboanga-power-utility

MANILA, Philippines — The Department of Energy has found several violations in its initial audit on the dispute between Western Mindanao Power Corp. (WMPC) and Zamboanga City Electric Cooperative (Zamcelco), a ranking official said.

DOE is currently conducting an audit on WMPC and Zamcelco’s investor manager Crowninvestment Holdings Inc. and Desco Inc.

Based on the initial findings, DOE assistant secretary Redentor Delola said both sides have committed violations and lapses amid the power crisis in Zamboanga.

The initial findings were submitted to Malacañang.

 “On the side of Zamcelco, their violations include operating the generator sets (gensets) without COC (certificate of compliance),” he said.

The COC, issued by the Energy Regulatory Commission (ERC), is necessary before any generation company can commence commercial operations.

When WMPC stopped operating due to a critical fuel supply level, Crowninvestment installed gensets with up to 40 MW in capacity as a stop-gap measure to provide power supply to Zamcelco.

However, Delola said Zamcelco should not have installed and operated the gensets because there is a contract with a power plant that could be dispatched.

The DOE is also reviewing the investor management contract of Crown-Desco.

“The IMC is supposed to improve the operations of the power coop. But we found out during the audit, Crown will take care of generation, while Zamcelco will still deal with the distribution side of the business,” Delola said.

For WMPC, part of the audit will include questions on why it stopped operating its plant when Zamcelco’s past due accounts only reached P467 million.

The DOE earlier said Zamcelco’s debt went above P600 million, but WMPC did not stop operating its plant.

To complete its audit, the DOE asked Zamcelco to submit additional documents.

“We’re still waiting for data from Zamcelco…With those information, we can finalize the report and we can come up with a recommendation on how to move forward,” Delola said.