BATELEC II, GESMI urged to find compromise

MANILA, Philippines - Energy Secretary Jericho Petilla has advised Golden Era Steel Mill Inc. (GESMI) and the Batangas II Electric Cooperative (BATELEC II) to start finding a common ground to speed up the reconnection of power to a mothballed steel plant in Mabini, Batangas.

Petilla said if the two camps could not reach an agreement, GESMI can opt to find other sources of power for its steel plant.

“The plant can get power from other sources,” Petilla said.

Alejo Tatel, GESMI president, said rehabilitation of the steel plant has been completed since January but up to now the facility has not resumed operations due to lack of power.

“We asked Batelec II to provide power at least to the steel rolling mill so we can start running the plant and provide employment to the residents of Batangas. But BATELEC II management has been uncooperative and even gave us uncompetitive rates,” Tatel said, noting that the re-operation of the steel plant stands to generate some 220 jobs.

The National Electrification Administration (NEA) legal department said it will be “digging deeper” and “investigate” the allegations of  GESMI.

The Energy Regulatory Commission, for its part, also expressed willingness to act on the allegations raised by GESMI that BATELEC II offered a rate of P8 per kilowatthour compared to only P5.216 per kWh being charged by  Batangas I Electric Cooperative (BATELEC I) in its franchise area.

“If a complaint will be filed with ERC, yes, the ERC will be looking into it,” ERC executive director Francis Saturnino Juan said.

Golden Era took over the plant from PL Batangas Steel Corp. last year. PL Batangas was forced to shut down both its steel mill and smelting shop  after Batangas Electric  II cut the power supply to due to arrears amounting to P296 million.

Petilla said GESMI can seek exception and buy power from other sources through the open access scheme.