Under the four-page agreement, Napocor said the Cebu government will extend a P9.12-million loan to Celco to allow the latter to make an advance payment for the fuel requirements of the 2.74-megawatt (MW) Camotes diesel power plant, which is owned and operated by the Napocor-Small Power Utilities Group (Napocor-Spug).
Napocor earlier said due to budget constraints, it cannot afford anymore to provide the fuel supply of the more than 200 power plants under Napocor-Spug.
In the case of the Camotes power plant, Napocor-Spug was forced to scale down its operations from 24 hours to only nine hours last month.
The power utility subsequently asked Celco to advance the payment for the plant’s fuel requirements, but the electric cooperative did not have enough funds, either.
To resolve the situation, Cebu Governor Gwendolyn Garcia offered to grant Celco a loan for P9.12 million to enable the electric cooperative to make an advance payment to Napocor for the fuel supply of the Camotes plant.
Based on a fuel requirement of 3,000 liters per day and at a cost of roughly P34 per liter, the loan extended to Celco will allow it to secure three months’ fuel supply.
Napocor, in turn, will offset the amount advanced by Celco from the electric cooperative’s future power billings.
The Cebu government’s move to extend a loan to the cash-strapped electric cooperative has its legal basis in Section 16 of Republic Act 7160, or the Local Government Code of 1991, which empowers all local government units \ to “exercise the powers expressly granted, those necessarily implied thereof, as well as the powers necessary, appropriate and incidental for its efficient and effective governance and those which are essential to the promotion of the general welfare.”
Garcia said the financial relief extended to Celco will avert any further power shortages in Camotes Island, and will redound to the benefit of its residents. Situated approximately 33 miles northeast of Metro Cebu, the Camotes group consists of four small islands, namely, Poro, Pacijan, Ponson and Tulang.
Camotes Island is a top tourist destination not only in the province but in the entire Philippines, boasting of white-sand beaches.
Napocor president Froilan Tampinco said the Cebu government’s initiative was the best solution to the power situation in the island, and reflects the benevolence of the current leadership in the province.
“We hope that this agreement will be the template for other similarly-situated electric cooperatives in the Spug areas to follow,” Tampinco said.
