Palawan power producer to shut down ops due to unpaid subsidies

An imminent power crisis might befall the province of Palawan as one of the power producers supplying electricity to the island province might shut down due to financial constraints amid non-payment of subsidies by the National Power Corporation (Napocor).

During the hearing of the Senate energy committee on Wednesday, Puerto Princesa City Mayor Lucilo Bayron said Delta P Inc. informed his office, through a letter on September 12, of an impending “cessation of operations” and that the power company can only supply electricity until the end of the month.

Bayron told the panel, chaired by Senator Raffy Tulfo, that Delta P was struggling to secure new fuel supply deals to run its plant as it was unable to pay its previous fuel bills because the company still have not received Universal Charge for Missionary Electrification (UCME) payments from the Napocor which already ballooned to almost P500 million.

“Hindi na sila makabili ng bunker oil, 'yung fuel, nang hindi cash on delivery kaya affected ang kanilang operations (They cannot buy bunker oil or fuel on a cash on delivery basis that’s why their operations are affected),” the Puerto Princesa mayor said.

Delta P senior vice president for regulatory and industry affairs Joseph Lua confirmed during the hearing that the company indeed sent a letter to Bayron’s office.

Lua said the unpaid UCME bills by the Napocor to Delta P amounting to about P440 million were incurred from March to August 2022.

Napocor officer-in-charge Melchor Ridulme told the Senate panel that the agency is still confirming the amount owed to Delta P.

Ridulme said that so far the billing for Delta only amounts to about P100 million.

Nonetheless, the Napocor chief committed to pay Delta P “but cannot commit the amount.”

Ridulme said that since Napocor’s funds are also limited, it will negotiate with Delta P for a staggered payment to settle the entire amount it needs.

Under the Electric Power Industry Reform Act (EPIRA), Napocor shall perform missionary electrification or provide power generation in areas not connected to the transmission system. Its missionary electrification function shall be funded from the revenues from sales in missionary areas and from the universal charge to be collected from all electricity end-users.

Power suppliers in off-grid areas can avail of the Napocor’s UCME subsidy as it is an “avenue to support the government’s thrust of total electrification.”

Lua said Delta P is coordinating with Napocor regarding the unsettled UCME subsidies.

He added the company is “exerting all efforts to stretch cash flows… Hopefully we can secure a new credit line for fuel while waiting for payment from Napocor.”

Delta P Inc., established in 2002, is jointly owned by Vivant Energy Corporation and Gigawatt Power Inc.—AOL, GMA News