Napocor acts to avert fuel supply run-outs in small power plants

MANILA, Philippines - Reacting to reports of power shortages in far-flung areas, the National Power Corp. (Napocor) said it was working to avert a fuel supply run-out in small power plants in far-flung islands and inland barangays being operated by its missionary electrification arm, the Small Power Utilities Group (SPUG).

Napocor president Froilan A. Tampinco said they have concluded negotiations with fuel suppliers like Pilipinas Shell Petroleum Corp. (Pilipinas Shell), Petron Corp., and Filpride Resources Inc. to resume fuel deliveries to the SPUG areas.

He said payment would be made “once it receives some financial relief from the National Government.”

According to Tampinco, only four out of the 157 power plants being operated by SPUG actually experienced a fuel run-out. These are the Casiguran Diesel power plant in Aurora, the Cuyo diesel power plant in Palawan, Power Barge 108 in Tawi Tawi and the Camotes diesel power plant in Cebu.

In the case of Camotes, the fuel problem lasted for only three days (from Feb. 9 to 11), while Power Barge 108 was out of diesel for only one day (Feb. 3), as the delivery of its fuel supply was delayed due to bad weather.

“Due to budget constraints, National Power has indeed been experiencing some problems with the fuel supply of the SPUG areas, but we wish to assure the public that we are already undertaking several mitigating measures to address the matter,” Tampinco added.

He added that local government units and electric cooperatives have agreed to advance the payment for the fuel requirements of the SPUG plants in their areas, as was the case in Cebu and Siquijor, and soon, in Palawan and Romblon.

Meanhile, Napocor is hoping that the Department of Finance (DOF) and the Department of Budget and Management (DBM) would reimburse at least P2 billion, or half of the P4.367 billion that the power agency had advanced for the preservation and maintenance of the Bataan Nuclear Power Plant (BNPP).

In separate letters to Finance Secretary Cesar V. Purisima and Budget Secretary Florencio V. Abad, Tampinco said the requested fund will be used to immediately settle Napocor’s overdue fuel payables, which has run up to P1.3 billion.

The rest of the requested P2-billion reimbursement will be used to pay for Napocor’s ongoing fuel deliveries, as well as those that are scheduled until the middle of March 2011.

Energy Secretary Jose Rene D. Almendras endorsed Napocor’s request for financial reimbursement.

“Following our evaluation of National Power’s request vis-à-vis its precarious financial situation and its impact on the critical power situation in the missionary areas . . . the Department of Energy finds the request in order and hereby endorses it for the release of an initial amount of P2 billion, representing partial reimbursement of expenses for the BNPP preservation and maintenance,” Almendras said.

In 1986, Napocor transferred all BNPP assets were transferred to the National Government in 1986. However, Napocor continued to shoulder the expenses for the upkeep of mothballed nuclear power plant amounting to roughly P40 million to P50 million per year.

From 1986 to end 2010, Napocor accumulated P4.367-billion worth of advances for BNPP-related advances.

The energy secretary said the reimbursements may be charged against the Gas-Malampaya Fund, pursuant to DBM-DOE-DOF Joint Circular 3-08, which pertains to the implementing guidelines for the release of funds from the Malampaya Gas royalty fees.