A blackout looms over the bustling Bantayan Island off northern Cebu province with the tug-of-war between two bidders still unresolved by the Energy Regulatory Commission.
Local power distributor Bantayan Island Electric Cooperative conceded its preferred generation firm, Isla Norte Energy Corp., would charge higher rates than current electricity provider Bantayan Island Power Corp.
The 15-year contract of Bipcor will expire on Nov. 8, 2021 while the ERC remains undecided on the draft power supply agreement filed by INEC which claimed it has clincheda new 15-year contract.
BIPCOR raised legal infirmities on the deal between INEC and Banelco, alleging that the bids and award committee did not follow the rules when it selected and ruled in favor of Vivant Energy Corp., INEC’s holding company that actually took part in the bidding.
INEC was introduced as Vivant’s substitute in the unfinished transaction, the legality of which was also questioned by Bipcor.
The question on who would energize Bantayan after Nov. 8 remains uncertain, without a clear mandate granted by the ERC.
To resolve the issue and ward off the likelihood of an indefinite blackout in Bantayan, Cebu Gov. Gwen Garcia called for an emergency meeting on Thursday, attended by representatives of Bipcor and INEC, the local electric cooperative, the ERC and the mayors of the three Bantayan towns.
Asked by the governor about his company’s power generation capacity, the Bipcor representative said they have more than enough to meet the demand of 7 megawatts, augmented by two rented generators set in place since last Sept. 14. Bipcor also signified its offer to continue to supply power to the island beyond the expiration of the PSA.
Although she acknowledged the need for additional power in Bantayan, Garcia said that she had made representations with ERC chief Agnes Devanadera on behalf INEC, telling the latter that INEC had already completed the testing and commissioning of a new power plant in Bantayan.
She also disclosed that she had urged ERC to allow INEC to beef up Bipcor’s power supply for the time being, in the process effectively extending INEC’s two-month testing period.
Garcia also batted for the approval of a provisional authority for the PSA in favor of INEC, as well as the approval of INEC’s certificate of compliance.
INEC is owned by the Garcias of Cebu, who also previously owned VECO.
Observers, however, noted that all the actions and measures suggested by the governor were ERC powers that local government units could not arrogate upon themselves.
Under the law, the provisional authority is part of ERC’s rate setting functions and should not be subordinated to any LGU instruction or representation, unless the LGU is part of the rate process as intervenor. Even so, the grant of the PA should be on the basis of merits.
The ERC representative informed Garcia that the provisional authority for INEC’s PSA to be conferred by the Banelco was still under deliberation by the regulatory body, adding that INEC’s application for COC was also under study by the ERC technical division.
The Bipcor representative said that while there was a recent incident of brownout, the company as doing its best to deliver reliable and sustainable service, adding that outages could not be entirely avoided due to other factors, including faults in the distribution lines that are Banelco’s responsibility.
In a letter to Bipcor dated Oct. 15, Banelco admitted that INEC’s power rates would be higher than Bipcor’s, but tried to downplay the issue.
“The applied TCGR [total cost generation rates] of INEC might be a little higher compared to the existing TCGR of BIPCOR, but the availability and reliability of INEC power plant is more than enough to justify the very slight difference on their rates,” the letter said.