Zamboanga City’s power problems are caused by the unjustified refusal of Crown Investment Holdings Inc. and Desco Inc. to honor Zamcelco’s contractual obligations and pay for electricity already supplied and paid for by its consumers.
This was the declaration of executives of the Western Mindanaio Power Corporation (WMPC) during a press conference held in Manila yesterday.
WMPC claimed that Crown’s refusal to settle its obligations despite repeated demands for payment caused Zamcelco’s unpaid accounts to WMPC to balloon to P467 million from October 2018 to February 2019. This prevented WMPC from procuring the fuel needed to run its power plant which provided the voltage support needed by Zamboanga City.
Since the forced stoppage of WMPC’s operations in February 2019, unscheduled power outages ranging from one to six hours have become a daily occurrence in Zamboanga City as the National Grid Corp. of the Philippines (NGCP) has been struggling to maintain grid stability in the Zamboanga Peninsula.
“Without the reactive power support provided by WMPC, there will always be blackouts in the city despite the abundance of power supply in the Mindanao grid,” said Joseph Nocos, vice president for business development of WMPC.
“The immediate solution to the power problem in the city is to allow WMPC to operate its power plant because it is designed to provide not only capacity but stability to the grid as well – unlike Crown’s generator sets which are ineffective and expensive,” he added.
Crown has been justifying its refusal to pay by claiming that WMPC-Zamcelco PSA is not effective and that WMPC overcharged the electric cooperative, he said.
During the press briefing, WMPC asserted that these allegations by Crown Investment Holdings have no contractual and legal bases.
“WMPC never overbilled Zamcelco. The amounts billed and paid for were calculated in accordance with the payment formula provided for in the power sales agreement (PSA) between Zamcelco and WMPC,” Nocos explained.
“This PSA has been implemented by both Zamcelco and WMPC since December 12, 2015. From that time, ZAMCELCO has been dispatching the WMPC power plant, WMPC has been delivering the energy requested by ZAMCELCO, and the cooperative has been paying for the electricity provided by WMPC – all in accordance with the PSA,” he added.
Nocos said the allegations of overbilling were based upon their claim that the PSA between ZAMCELCO and WMPC is not effective. He pointed out that PSA is effective because it was freely entered into and signed by both parties (WMPC and Zamcelco), it was duly approved by the ERC, and it has been implemented with Zamcelco nominating and WMPC supplying power for over three years since December 12, 2015.
It was only upon the entry of Crown-DESCO in January 2019 that this proper and full implementation of the PSA was unilaterally stopped and disregarded by Crown.
WMPC said it is fully committed to resolving the artificial power crisis once the contractual dispute is resolved. To this end, it has brought the matter to the proper forum – the ERC.
“We are requesting the ERC to act decisively and justly on the pending dispute resolution to restore reliable and stable power to Zamboanga City,” Nocos said.
The continued power outages are wreaking havoc on
Zamboanga City, threatening livelihood, security, access to basic services and
the conduct of peaceful elections.
Canneries are reportedly spending up to 30% more
in power costs as they have to run their generators to ensure uninterrupted
production.
