ERC approves Paleco, DMCI Power Corp supply deal

MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved a temporary power supply agreement between a Consunji-led power producer and an electric utility in Palawan.

The agreement would augment available electricity amid the influx of tourists in Puerto Princesa in the peak travel season, the companies said.

“The Commission provisionally approves the memorandum of agreement (MOA) between Palawan Electric Cooperative Inc. (PALECO) and DMCI Power Corp.,” ERC said in an order dated Dec. 6.

Under the MOA, PALECO would buy electricity from DMCI Power’s five-megawatt (MW) diesel generating sets from December to Aug.31, 2013.

Provisional rates are P1.3497 per kilowatt-hour (kWh) if 40 percent of the generators’ capacity is used and P1.0789 per kWh using a 50 percent load factor.

In July, the subsidiary of Consunji-led DMCI Holdings Inc. signed a 15-year deal to supply the electricity needs of PALECO through a 25-MW diesel power plant.

Prior to the long-term supply contract, PALECO asked DMCI Power to operate diesel generating sets.

In July, the Puerto Princesa city council declared a state of emergency due to insufficient power supply, with outages totaling 77.15 hours from May to September.

“This has greatly affected the business and tourism sectors of the city,” PALECO said, adding that outages are expected to worsen in the peak tourist season of December.

“The Commission believes that the proposed installation of the five MW diesel plant is needed to augment the supply deficiency and ease the frequent power disruptions,” ERC said.