Paleco urged to cut supply pact with nonperforming gencos

By Lenie Lectura – September 28, 2017

from Business Mirror

THE Palawan Electric Cooperative (Paleco) was urged to immediately terminate power-supply agreements with under-performing generation companies (gencos).

Rotating power outages are still being experienced by customers of Paleco, mainly due to problems with power producers supplying power to the electric cooperative.

Alarmed by the grave impact of the Palawan energy crisis on the provincial economy, Sen. Sherwin T. Gatchalian is pressing Paleco to make “drastic moves” to immediately resolve the frequent brownouts that have plagued the province since the beginning of the year.

One of the solutions proposed by Gatchalian was for Paleco to invoke its legal right to terminate bilateral power-supply contracts.

“Paleco should study the performance of the gencos. Paleco should recommend to rescind the contacts if there were violations committed on the part of the generating companies. You have to stop accommodating them because if we keep on accommodating them, nothing will come good out of it,” Gatchalian told Paleco as he recommended the undertaking of a new competitive selection process  to find alternative energy sources to replace the erring gencos and provide a stable energy supply for the province.

The Senate Committee on Energy and stakeholders in the local energy industry of Palawan also agreed that a change in the order of dispatch in the coverage area of Paleco is a viable provisional solution to the protracted power crisis.

“From what I see, just rearranging your dispatch, there would be
 immediate results,”Gatchalian said.

The National Electrification Administration and the Energy Regulatory Commission agreed wi
oposal for Paleco, as the system operator, to change its priority dispatch according to plant design: base-load generating units must be prioritized while peaking load must be the last dispatch. Changing the order of dispatch would have immediate impact on the power outages by stabilizing electricity supply.

According to data provided by the Senate Energy Committee during a hearing held this week to probe the power situation in Palawan, even just a single hour without electricity costs the province from P6.1 million to P10.7 million in economic productivity losses.

“Palawan is a fast-developing economic and tourism center. The volatility of its power supply will pull back the development of the province,” said Gatchalian, the chairman of the Senate Energy Committee.