Cebu power threatened shutoff lifted ERC, NPC, CPPC talks going on

Energy Regulatory Commission (ERC) Chairman Manuel R. Sanchez recently announced that Cebu Private Power Corporation (CPPC) has lifted indefinitely its notice to cut off power supply in Cebu as a result of the on-going negotiations among ERC, NPC and CPPC.

Earlier, CPPC gave a 45-day extension notice to operate its power plants. Said notice is supposed to expire tomorrow, July 25.

Chairman Sanchez allayed the fears of the consumers in Metro Cebu and expressed optimism that this issue will be settled immediately. ”The government is doing its best to avoid any possible power shutdown in Cebu,” he said.

CPPC is an independent power producer (IPP) which sells power to Visayan Electric Company (VECO). This IPP supplies one-fourth of Metro Cebu’s power needs. Earlier, it threatened to stop operating citing heavy losses due to higher fuel costs and reduced purchased power cost adjustments of NPC.

In a related incident, ERC issued an Order directing NPC to begin implementing the Php2.2412/kWh generation rate adjustment mechanism (GRAM), which was approved by the Commission on May 15, 2003.

Said Order will enable CPPC to sell power to VECO at more reasonable levels. Current selling price of CPPC to VECO cannot exceed 98% of NPC’s reference rate.

Noting the adverse economic impact of a possible power outage in Cebu, Chairman Sanchez said that the primary objective of the on-going talks among ERC, NPC and CPPC is to provide the residents and the business community in this city continuous and reliable supply of energy at reasonable cost.

July 24, 2003