ERC seeks solution to avert Metro Cebu shutdown

ERC Chairman Manuel R. Sanchez earlier announced that the impending power shut-off in Metro Cebu will soon be settled. In its effort to alleviate the power situation in the city, ERC has recently ordered the National Power Corporation (NPC) to begin implementing the Php2.2412/kWh generation rate adjustment mechanism (GRAM), which was approved by the Commission on May 15 this year.

The ERC Order will enable the Cebu Private Power Corp. (CPPC) to sell power to Visayan Electric Company (VECO) at more reasonable levels. At present, CPPC’s selling price to VECO cannot exceed 98 percent of NPC’s reference rate.

NPC, however, defied the ERC Order, claiming that the new rate for the Visayas Grid is not sufficient to recover costs. The state-run power firm filed a motion for reconsideration.

“We are duty-bound to compel NPC to abide by the orders of the Commission. The national interest should prevail over the interest of NPC,” Sanchez said.

The Cebu Chamber of Commerce and Industry (CCCI) welcomed ERC’s move. In a statement to the Philippine Star, CCCI president Charles Co said that a power rate increase “is better than rotating brownouts.”

CPPC earlier cited heavy losses due to higher fuel costs and reduced purchased power cost adjustments of NPC as the main reasons for its decision to stop operations. The power producer decided to postpone the shutdown to July 25, saving the day for VECO, which stands to lose one-fourth of Metro Cebu’s power requirements.

July 16, 2003