Western Mindanao Power Corp. and Crowninvestments Holdings Inc., the investor-manager of the Zamboanga City Electric Cooperative, on Friday signed a compromise agreement that will put an end to the power outages in Zamboanga City.
The deal was Crown’s third offer of a partial payment to cover the operational and fuel costs of WMPC, owned by the Alson Group. Crown first offered to pay P150 million in February before raising its proposal to P220 million in April 3. WMPC rejected both offers.
Under the compromise, Crown will give a partial payment of P220 million to WMPC. WMPC will then run its power plant for 60 days after receiving the full payment.
“We have been trying to settle with WMPC for three months now. We are glad that WMPC finally accepted this compromise. With this, we can stop rotational brownouts and stabilize electricity in the city,” said Crown representative Jomar Castillo in a statement.
The resumption of the WMPC’s operations provides immediate relief to residents and businesses that have been reeling from the effects of power outages reaching up to six hours.
“We are glad to restore power and normalcy to Zamboanga City,” said Joseph Nocos, vice president for business development of WMPC and the Alsons Power Group.
The compromise, proposed by Zamboanga City Mayor Maria Isabelle Climaco-Salazar, is a temporary measure to address the power outages in Zamboanga City pending the legal dispute filed with the Energy Regulatory Commission (ERC).
“By signing the compromise agreement, we reaffirm our commitment to be Zamboanga’s partner for growth in the long term,” Nocos added.
WMPC’s commitment to resume operations comes days before the May 13 elections, which will need stable and consistent power to ensure the integrity of the results.
Meanwhile, the Zamcelco manager said the compromise agreement was without prejudice to the respective claims of both parties before the ERC.
Crown discovered through a financial audit in late January that WMPC allegedly over-billed the co-op in the amount of P441 million from 2015 to 2018.
Zamcelco claimed WMPC billed the coop for capacity recovery fee, and operations and management without basis, citing that the power supply agreement with the co-op was not yet in effect.
WMPC also allegedly billed the co-op for a contracted capacity of 50 megawatts, when Zamcelco nominated a daily average of 25 megawatts, or 50 percent less than the amount the cooperative paid for.
Crown-Zamcelco sought a refund of the overpayments with the ERC.
“As the new investor-manager, we are looking out for Zamboangueños after years of mismanagement of the city’s power co-op. Zamboangueños were made to pay more than what they should have. We want to return their money to them,” Castillo said.