Public utilities like power distribution companies are given franchises to serve the needs of the people in their constituent communities. As such, they render service in the public interest. But the “public” in “public service” turns into a joke when utility
companies start making people’s lives miserable. This happens when they put their business concerns before the public’s interest.
What is happening in Zamboanga City is a case in point. Since early February, about a million residents have been complaining of frequent power outages, not because of inadequate power supply, but because of unresolved issues involving a power generator and an electric cooperative.
A news item published online on February 5 by Politiko Mindanao, a social news and blog site, said: “The Western Mindanao Power Corp. [WMPC] has started to curtail its power supply to Zamboanga City Electric Cooperative Inc. [Zamcelco], resulting to rotational brownout in the city. The company started Monday, February 4, the temporary suspension of power supply to Zamcelco after the latter failed to settle its total past due accounts of P235 million.”
The WMPC is a 100-megawatt diesel power facility in Sangali, Zamboanga City. It’s one of three diesel power facilities put up by the Alcantara Group in the 1990s to help alleviate the power shortage in Mindanao via an energy conversion agreement (ECA) with the National Power Corp. From 1997 to 2015, WMPC’s sole customer was Napocor. When its ECA with Napocor ended, WMPC began implementing its power sales agreement with the Zamcelco, supplying up to 50 MW of electricity to Zamboanga City power consumers.
Zamcelco last year went through the process of selecting an Investment Management Contractor that would manage the co-op. In September 2018, Crown Investment Holdings Inc. (Crown) was awarded the IMC contract. Crown took over the management of Zamcelco in January 2019. Zamcelco, however, has been unable to meet timely payments to WMPC for the power dispatched to the co-op. By the middle of January 2019, Zamcelco had about P300 million in unpaid bills to WMPC representing vouchers for power delivered in October, November and December 2018.
As diesel fuel constitutes about 90 percent of generation costs, WMPC said it became unfeasible to continue ordering fuel from its suppliers without Crown/Zamcelco settling unpaid obligations. WMPC reportedly sent demand letters to Crown/Zamcelco twice in January and again on February 1, asking for payment and informing the power co-op that its current diesel fuel supply would run out on February 4.
On February 2, WMPC received a response from Crown dated February 1, which said that Crown was looking into the possibility of overcharging on the part of WMPC, and that pending its examination of the bills from the power generator, all payments were being withheld. It likewise requested that WMPC reconsider the decision to cease operations on February 4.
On February 3, Sunday, WMPC published an open letter to the people of Zamboanga City informing them that due to Zamcelco’s failure to pay its bills, it would not be able to continue advancing fuel costs and that since the current supply is about to run out, the WMPC plant would stop operating at 1:30 p.m. on Monday (February 4).
On February 8, at the behest of Rep. Celso Lobregat, NEA Administrator Edgardo Masongsong and local government officials, a meeting was held with representatives of Crown/Zamcelco and WMPC to find a solution to the problem. During the conciliatory talks, Crown reportedly agreed to consider a temporary solution, for it to pay P150 million to enable WMPC to buy fuel while the issues are being threshed out. Obviously, no payment was made because WMPC’s plant operations are still on hold as of this writing.
We hope that both parties can swiftly resolve their dispute out of court to avoid a stalemate that would create distrust. If both parties choose litigation as a way to settle the issue, we see prolonged and more frequent power outages. This should not happen in a region with a happy problem of power surplus. Making Zamboangenos suffer because of an avoidable impasse involving a power generator and an electric cooperative is simply unacceptable. Putting the welfare of citizens above everything is the essence of public service.