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ERC gives thumbs up on SREC’s bid to Operate as QTP in Palawan

The Energy Regulatory Commission (ERC), on 05 October 2016, approved the: (i) application of Sabang Renewable Energy Corporation (SREC) for Authority to Operate (ATO) as a Qualified Third Party (QTP) in Barangay Cabayugan, Puerto Princesa City, Palawan and (ii) correspondingly, its QTP Service and Subsidy Agreement (QSSA) with the National Power Corporation (NPC). The ERC’s approval of SREC’s application will enable the latter to provide access to electricity by some 600 households, 50 small hotels and business establishments and 2 mid-sized hotels in the Sabang-Cabayugan area.

Barangay Cabayugan was chosen as a QTP Service Area by the City Government of Puerto Princesa due to the increasing economic activities driven by the eco-tourism in the adjacent Puerto Princesa Subterranean River National Park in the Sabang area. The Sabang-Cabayugan area was declared as an unviable area and open for provision of electricity service by a QTP, through a Board Resolution issued by Palawan Electric Cooperative, Inc. (PALECO) on 26 November 2013.

On 08 April 2015, the QSSA was signed and executed by and between SREC and NPC followed by the execution of a Waiver Agreement between PALECO and SREC.  The parties are required to execute the said Waiver on the basis of the Build, Own and Operate (BOO) Agreement and pursuant to Section 8 (b) of DOE QTP Participation Circular, whereby PALECO waived the right to provide electricity service in the QTP Service Area in favor of SREC.   The Waiver formally authorized SREC to plan, design, build, own and operate a Hybrid (Solar PV/Diesel) Power Plant and a Micro Power Grid.

Under the QTP-SSA, SREC shall provide electricity to 600 households, 50 small hotels and business establishments and 2 mid-sized hotels. The hybrid power plant will be composed of 1.4 MWp solar PV, 2.3 MWh storage batteries (clean type) and 4 x 320 kW diesel generators while the micro grid will be composed of 14 circuit-kilometers of a 13.2 kV distribution facility with a total capacity of 1.5 MVA of distribution transformers.

Brgy. Cabayugan currently runs its own system of electrification using diesel generation. Two large hotels are fully run on diesel generators, while all other small businesses and individual households are limited to the available power through shared generators for 4-6 hours per day at a relatively high cost per unit of electricity.

SREC’s application was approved subject to the following conditions: 1) SREC shall use the ERC-applicable rates (Full Cost Recovery Rate); 2) The total blended monthly full cost recovery rate (FCRR) shall be determined based on the actual energy mix of solar and diesel; 3) The pass-through fuel cost shall be subject to the actual fuel consumption rate or the approved efficiency cap whichever is lower; 4) The subsidized approved retail rate (SARR) shall be charged to SREC’s end-user; 5) SREC shall be allowed to recover the subsidy from the ERC-approved Universal Charge-Missionary Electrification (UC-ME); 6) SREC shall submit its Audited Financial Statements (AFS) for the first full year of commercial operation and the final Independent Engineer’s Report; and 7) SREC shall submit, after seven (7) years, a revised tariff scheme and a proposed revised Subsidized and Approved Retail Rate (SARR).

“The approval of Sabang Renewable Energy Corporation’s application will benefit the residents and establishments located in the Sabang-Cabayugan area by providing a long-term and strategic solution involving a private-public partnership and by offering an eco-friendly solution to their power woes”, ERC Chairman and CEO Jose Vicente B. Salazar stated.

Date Published: 10/12/2016


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