ERC to hold public consultation in Cebu—Vows to address looming power shortage
06/11/2003

The Energy Regulatory Commission (ERC) will convene en banc in Cebu City on June 12, 2003 to conduct public consultation to hear the issues involving Cebu Private Power Corporation (CPPC) and Visayan Electric Company (VECO).

Joining ERC Chairman Manuel R. Sanchez are Commissioners Leticia V. Ibay, Carlos R. Alindada, Oliver B. Butalid and Mary Anne B. Colayco. Director Ma. Teresa R. Castañeda of the ERC Legal Affairs Service will also be joining the ERC officials.

ERC Chairman Sanchez is determined to thresh out the issues between CPPC and VECO. He called on CPPC to continue its operations pending the results of the public consultation.

“We must protect the public interest,” Chairman Sanchez said in the light of the impending power shortage in Cebu.

Earlier, CPPC, an independent power producer (IPP), threatened to stop operating beginning June 15, citing heavy losses due to higher fuel costs and reduced purchased power cost adjustments of NPC, according to some newspaper accounts. At present, CPPC’s selling price to VECO is effectively lower than NPC’s rate in the Visayas grid.

A renegotiation of the power purchase agreement between CPPC and VECO could defuse the plans of the former to shut down its operations. Thus, before any rate adjustment could be made, the two parties should renegotiate said agreement and thereafter, have the new agreement approved by the Commission. It is only then that the imposition of a new rate could be made possible.

Chairman Sanchez believes that a compromise agreement will ultimately be reached between the two parties to prevent economic losses and spare the public from the inconvenience of a power outage.

CPPC, which operates a 70 MW Bunker C-Fired Power Plant in Carbon, Cebu, supplies about one-fourth of VECO’s power requirements to energize Metro Cebu .

On March 12, 2003, ERC issued a Certificate of Compliance (COC) to CPPC, a requirement before a generation company or an IPP could start its commercial operation.