The government-run National Electrification Administration (NEA) is offering an emergency loan of at least P50 million to Occidental Mindoro Electric Cooperative Inc. (OMECO) to avert outages that could plague consumers served by the electric utility.
According to NEA, its loan offer could be seen as a “short-term solution to the power supply problem” plaguing end users in Occidental Mindoro.
Many electricity cooperatives, including OMECO, are currently being tortured by power outages – and this was partly due to insufficient financial resources that their electricity suppliers could use for fuel supply so that they could continuously meet the electricity needs of consumers in their service areas. .
NEA said it could extend the credit facility to Mindoro Power Company, which in turn could be used to pay its dues to its sole power supplier Occidental Mindoro Consolidated Power Corporation (OMCPC).
As NEA Administrator Emmanuel P. Juaneza pointed out, “the 50 million pula will be used for the fuel supply of the OMCPC”.
Nevertheless, the electrification agency reported that OMECO’s board had issued a resolution “opposing the use of the loan”, as they allegedly felt that “it is the responsibility of OMCPC to buy fuel.
Given the turn of events, Juaneza noted that “NEA is currently reviewing board action.”
As a reminder, the Energy Regulatory Commission (ERC) had previously penalized OMECO, therefore, the electric utility was asked to bear 50% of the universal load for the Missionary Electrification Grant to OMCPC and this was “due to the delayed implementation of its Competitive Selection Process (CSP).
CSP is a tendering exercise imposed on electric utilities, like OMECO, to select their electricity suppliers on a ‘least cost basis’ – and this will be factored into bids prices submitted during the auction process.
But as Atty Nelson Evangelista, legal adviser to the Electricity Cooperative, put it, “the CSP’s delay was not OMECO’s fault”, pointing out that “the delay was justified due to events that occurred or extraordinary circumstances”, mainly related to the covid19 pandemic.
The ERC, for its part, undertook to review the sanction imposed on OMECO; while also allowing the state-run National Power Corporation (NPC) to temporarily operate a 10 megawatt generator set located within the jurisdiction of the Occidental Mindoro power company.
Beyond the proposed short-term solutions, it was also prescribed that the next steps to be taken as a medium-term solution would be for NEA and OMECO to “scout for potential suppliers to fill the gaps in the power supply as the Commercial operation of the automated economic planning and power plant dispatch is planned for next year.
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