A local power impasse may build a scenario of national interest
AREPORT
that came out in this paper on the current power situation in Zamboanga City deserves national attention and dissection. We all know that southern gateway plays a key role not only in trade and commerce but in national security, as well.
The February 21 news item said that residents and businesses are already complaining of longer and more frequent outages which are hurting both households and enterprises. Sooner or later, these nasty blackouts will impact negatively on the local economy.
All because of a reported stalemate between generating company Western Mindanao Power Corp. (WMPC) and distributor Zamboanga City Electric Cooperative (Zamcelco). Fortunately, it is a situation that can be solved – but only if the contending parties choose to side with the consumers.
WMPC claims it has run out of fuel because Zamcelco, which is now being managed by Crown Investment Holdings, Inc., refuses to pay its arrears that amounted to more than P300 million at the time the power generator was sending demand letters last January.
Crown/Zamcelco, on the other hand, is citing possible overbilling as the reason for withholding payments to WMPC. Crown, which was awarded an Investment Management Contract (IMC) to manage Zamcelco late last year, said they were still reviewing previous and current invoices when the demand letters were sent.
But WMPC has told the city council that they did not receive any communication from Crown/ Zamcelco until February 1 when the generating company said they could no longer operate their plant by February 4 because it could not procure fuel to run the plant due to non-payment by Crown/Zamcelco. WMPC has been advancing the cost of fuel for several months already.
What ensued are rotating power outages or blackouts that persist up to the time of this writing.
But who exactly are these contending power players?
A quick check on the website of Alsons Power Group, of which WMPC is a part, shows that the company has been operating in Zamboanga City since 1997 through its 100-megawatt (MW)diesel facility – one of three diesel plants developed by the Alcantara Group and their partners in the 90s to help ease the power shortage in Mindanao.
From 1997 till December, 2015, WMPC was under an energy conversion agreement (ECA) with the National Power Corporation (NPC) wherein NPC was the plant’s sole customer and dispatched WMPC’s electricity to different areas in Mindanao. During the ECA period, when there were threats to the voltage stability or power security in Zamboanga City, WMPC reportedly operated on “island mode” and provided power directly to the city shielding the residents of Zamboanga City from further power outages. In 2015, the ECA with NPC ended and WMPC entered into a power sales agreement (PSA) with Zamcelco wherein it provides up to 50 MW of electricity to Zamboanga City.
Some opinion pieces in local newspapers even pointed out that WMPC ensured a blackout-free Christmas in 2015, the time the power supply agreement (PSA) with Zamcelco commenced. Unfortunately, the same PSA – which stipulates that WMPC can directly supply up to 50 megawatts to the city’s power consumers – is now being questioned by Crown.
So who is Crown Investment Holdings?
Not much can be gleaned from the Internet except for some reports about the decision of the National Electrification Administration (NEA) to award it the investment management contract (IMC) in August last year. Because of Zamcelco’sallegedly very poor financial condition and technical inabilities, an IMC was necessary to turn it around and nurse it back to good health.
News reports identified Crown with another entity, Desco, Inc. which is supposed to provide the technical know-how and expertise, as the winning tandem. Apart from the information readily available in the digital space, there is not much info about them. A search on the Securities and Exchange Commission (SEC) website for Crown Investment Holdings, Inc. and Desco, Inc. its consortium partner in the IMC renders a “no data available” result.
Whether there is legal basis for Crown/Zamcelco’s decision to withhold payment to WMPC remains to be seen, and any litigation can take years to resolve. In the meantime, the people suffer. And they’ve been paying their monthly bills, knowing that their electric cooperative refuses to pay a major supplier.
The power situation in Zamboanga City is increasingly becoming untenable but not completely hopeless. It will take the national government and regulators like NEA stepping in to find solutions.
For the southern hub of trade and commerce that also hosts a major military command, the stakes are simply too high if no decisive government response is made.
***
ISLA VERDE POWERS UP.
It was a truly historic moment when top officials from the Department of Energy (DOE), and the Provincial and City Governments of Batangas were on hand to inaugurate the electrification of Isla Verde last February 15, 2019.
The result of a collaboration between the Batangas City Local Government, United States Agency for International Development (USAID), and Meralco, a 32-kilowatt (kW) solar panel microgrid and 192 kilowatt hour (kWh) battery storage facility was formally switched on.
The project is a solar microgrid – small-scale power grids that can be operated independently from the country’s interconnected network of power transmission facilities. It supports the distribution utility’s initiatives towards using more sustainable energy sources and highlights efforts on rural electrification, a point of focus by President Rodrigo Duterte, who has said that he wanted to put a stop to hurdles in the electrification of rural areas.
And now the island can further position itself as a magnet to foreign visitors and a haven for divers.
My neighbor, who is a scuba diver, seemed very excited over the recent developments as he said a cadre of investors and property developers are already waiting to visit, maybe settle down there, and bring out the best of Isla Verde. It makes even a guy like me interested in taking a crack at scuba diving as a new hobby. It’s never too late to learn something new even for this septuagenarian.