CAPITOL has decided to intervene and prevent a blackout in Camotes Islands.
In a meeting with officials of the National Power Corp. (Napocor), Camotes Electric Cooperative (Celco) and the Energy Regulatory Commission (ERC), Cebu Gov. Gwendolyn Garcia said Capitol can lend money to Celco with minimal interest so that the distribution utility can buy fuel needed to operate its power generation plant.
Napocor President Froilan Tanpinco, in a presentation on the Small Power Utilities Group (Spug) financial and operating situation in missionary areas, said it does not have enough funds to purchase fuel for Celco’s facility.
He said Napocor’s Spug get funds from the universal charge on missionary
electrification (Ucme), 38 percent; subsidized approved generation rate, 61.3 percent; and the transmission delivery service rate, 0.7 percent.
Napocor projects the fuel requirements under Spug for 2011 to cost P7.452 billion.
Advance
Tanpinco, however, said only P3.308 billion was approved for the Ucme, or a shortfall of P4.144 billion.
He proposed that Celco make an advance payment of its fuel requirements, which will
amount to P3 million a month.
But Celco general manager Rolando Camaso said the cooperative cannot afford to advance P3.2 million a month so Napocor can purchase and deliver fuel to Camotes.
He admitted, though, that it has collected more than P5 million from its customers.
Capitol Consultant Rory Jon Sepulveda said Capitol can lend money to Celco with minimal interest under the general welfare provision of Republic Act 7160 or the Local Government Code.
But ERC 7 Director Joel Bontuyan said that if Celco intends to pass on the interest to consumers, the distribution utility will have to seek approval from the ERC.
To operate 24 hours a day, Celco needs 6,000 liters of fuel a day. With fuel prices at P34 per liter, Celco would spend P204,000 a day or P6 million a month.
At present, Tanpinco said Celco operates only nine hours a day, from 4 p.m. to 1 a.m.
Garcia and Tanpinco explored the possibility of delivering fuel directly to Napocor from Petron Corp. to avoid the spread of charges that occurs when the fuel is purchased from distributors.
However, Tanpinco said that while this is allowed by law, the most convenient way is to lend money to Celco.
Sepulveda said the loan that Capitol will extend to Celco will be payable in 30 days.
