New power providers now supply 7 of 14 utility groups

Seven out of 14 small power utility groups or SPUGs of the National Power Corporation were already privatized, with the power needs of their respective areas to be supplied by private firms, the Department of Energy recently said.

The seven SPUG areas are those in Bantayan Island in Cebu, Oriental Mindoro, Tablas, Romblon, Marinduque, mainland Palawan and Catanduanes.

New power providers, or NPPs, will now supply these areas after winning the bidding for their respective power supply contract using bunker, diesel fuel, or hybrid (diesel-wind) energy.

The power supply contracts for the SPUGs in Bantayan Island and Oriental Mindoro were already submitted to the Energy Regulatory Commission for approval, while those of the rest will still be sent by their respective NPPs to the ERC within the first quarter of 2006.

There are three NPPs for the seven SPUGs. For Tablas, Romblon and Marinduque is the Coastal Consortium, for Oriental Mindoro, mainland Palawan and Catanduanes is the Power One Corporation, while for Bantayan Island is the Bantayan Island Power Corporation.

The DOE, on January 26, last year, opened the NPC's 14 SPUGs to privatization arrangements granting private firms the rights to supply power to these areas, which have steadily rising demands due to promising economic activities.

But only seven SPUGs, covering a total capacity of 82 megawatts, were privatized last December, said the DOE.

The DOE added that the NPPs in these areas could take over the supply of power either through outright purchase or lease of SPUG assets. They could also install new generating facilities and associated power delivery systems, said the DOE.

The NPPs are also expected to pursue projects that would resolve the lowest long-term cost of power and services, environmental compatibility with the local area and the most advantageous implementation schedule.

Energy Secretary Raphael Lotilla said the privatization of SPUGs will contribute in sustained improvement of NPC's finances, as this would reduce the total subsidy to these areas.

NPC estimated that the privatization of the seven SPUGs will give the NPC a potential fuel saving of P2-billion a year, resulting to lower rates for consumers in these areas.

The seven other SPUG areas yet to be privatized are in Masbate, Occidental Mindoro, Camotes Island, Siquijor, Basilan, Sulu and Tawi-Tawi. - Wenna A. Berondo