A power consumer warned that three supply contracts will run simultaneously for several months this year, resulting in expensive and surplus power in Bantayan Island which will be partly subsidized by consumers in other parts of the country.
Romeo Junia, an intervenor in two cases filed with the Energy Regulatory Commission involving the power supply in Bantayan Island, said consumers would pay for expensive but unnecessary surplus power if the ERC would approve Bantayan Island Electric Cooperative Inc.’s two new power supply contracts.
Junia said BANELCO general manager Lee Rivera confirmed in an ERC hearing on February 26, 2021 that all capacities contracted by BANELCO under its power supply contracts would have to be paid by consumers.
A resident of Antipolo City, Junia is a captive residential customer of Manila Electric Co. He said he is among electricity end-users who pay the Universal Charge for Missionary Electrification that subsidizes the power supply agreements of electric cooperatives such as BANELCO.
He is referring to ERC Case No. 2020-013RC or BANELCO’s application for approval of a 12-month interim power supply agreement and ERC Case No. 2020-032RC for a 15-megawatt, 15-year power supply agreement, both with Isla Norte Energy Corp. BANELCO also has an ongoing power supply contract with Bantayan Island Power Corp. that would not end until November 2021.
Junia said this means there would be three supply contracts running simultaneously from March to November this year.
Junia said Rivera testified that under the PSA awarded to INEC in February 2020, the capacity recovery fee for INEC’s guaranteed dependable capacity of 15 MW would be paid in full during the 15-year run of the PSA, regardless of BANELCO’s actual capacity offtake or use under the contract.
A similar take-or-pay provision is also in the IPSA which BANELCO and INEC signed in April 2020. BANELCO granted INEC a rate of P13.30 per kilowatt-hour for the PSA, while the IPSA the rate is P27 per kWh. BIPCOR’s current rate is about P11 per kWh, Junia said.
Junia said in the two new cases, BANELCO members would pay only the subsidized approved generation rate of P6.25 per kWh with the rest of the consumers—all electricity end-users—paying the difference of P7 per kWh under the PSA and P20 per kWh under the IPSA through the Universal Charge for Missionary Electrification.
The IPSA covers a monthly supply of 255,000 kilowatt-hours over 12 months, with actual deliveries beginning August 2020 until August 2021.
Junia said the PSA was signed in February 2020 and its 15-year term started from March 1, 2021 to March 1, 2036.