Occidental Mindoro

Occidental Mindoro officials decry high power rates, seek new suppliers

Chris Burnet Ramos

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Occidental Mindoro officials decry high power rates, seek new suppliers

POWER SUPPLY. Linemen of Occidental Mindoro Electric Cooperative during a feeder reconfiguration operation in August 2023.

OMECO IEC Facebook page

(1st UPDATE) Occidental Mindoro officials say the power crisis in the province will persist due to the high rates consumers are expected to endure until May

OCCIDENTAL MINDORO, Philippines – After the National Electrification Administration (NEA) boasted about resolving the power crisis in Occidental Mindoro, residents are now complaining about the high power rates.

On Christmas Eve, NEA Administrator Antonio Mariano Almeda highlighted the agency’s “resolution” of the power supply problems faced by some electric cooperatives in the country as its major accomplishment in 2023.

This includes power supply issues faced by Benguet, Maguindanao, and Occidental Mindoro provinces. In April 2023, the power supply in Occidental Mindoro was stabilized after a period of 20-hour daily blackouts.

Almeda noted in his report to the Philippine Rural Electric Cooperatives Association Incorporated (Philreca) the improved electricity situation in Occidental Mindoro following the power supply crisis. 

“The NEA worked with Occidental Mindoro Electric Cooperative Inc. (OMECO) and its electricity provider, the Occidental Mindoro Consolidated Power Corporation (OMCPC), to expedite key energy generation projects in the area to secure much-needed power supply,” read part of a NEA statement

However, Occidental Mindoro Vice Governor Anecita Diana Tayag told Rappler that he did not think the power crisis had been resolved given the high power rates still affecting consumers in the province. 

“Naniniwala ako, hindi pa natin nareresolba ang krisis sa kuryente. Patuloy pa po tayong naaapi. Itong napakamahal, nagtaas na presyo ng ating kuryente, isang malaking kaapihan ito. Hindi po affordable ang kuryente natin at kailangan pong maresolba ‘yun,” said Tayag.

(I believe that we still have not resolved the power crisis. We are still being oppressed. These costly electricity bills are huge oppression. Our electricity is not affordable and that should be resolved.)

Tayag said the province cannot rely on government subsidies, and they have to find power suppliers to bring the electricity prices down to affordable levels. 

Rate crisis

The province is currently suffering a power rate crisis which may last until April or May, Engr. Celso Garcia, OMECO general manager, told the Occidental Mindoro provincial board on Tuesday, January 9. 

This is after the OMCPC failed to fulfill its promise to finish the construction of its agrivoltaic farm by December 31, 2023. The solar plant project is one of the three power plants bundled together for the power supply agreement (PSA) with OMECO. 

Engineer Antonio Castronuevo of OMCPC said the power plant is 90% finished and set to be tested on Monday, January 15. 

Clothing, Hardhat, Helmet
VISIT. National Electrification Administration chief Antonio Mariano Almeda with Occidental Mindoro representative Leody Tarriela during the inspection of the OMCPC solar plant on November 21, 2023. OMECO IEC Facebook page

However, even if the joint application for the PSA is submitted after completing the plant, the Energy Regulatory Commission (ERC) will still require 75 days to process the application, unless the NEA urges the commission to expedite the process.

The delayed construction of the plant led to the ERC vetoing OMCPC’s provisional authority to operate. The provider subsequently entered into an Emergency Power Supply Agreement (EPSA).

Under the EPSA, no government subsidy is granted, including the Universal Charge for Missionary Electrification (UCME) subsidy that the province enjoys.

With a residential power rate reaching a staggering P20.4910 per kilowatt-hour (kWh) in December, OMECO now holds the record for the highest electricity bills among all distribution utilities in the country.

Compared to Meralco’s P11.2584 per kWh December rate for typical households, electricity rates in Occidental Mindoro are around 50% costlier. 

‘No to monopoly’

Based on ERC’s new implementing guidelines for procurement, execution, and evaluation of PSAs, a full PSA market share of a distribution utility is prohibited. Distribution utilities will be limited to source 50% of power supply contracts of its total demands. 

In Occidental Mindoro, all of its three power supply contracts are distributed only by OMECO.

Tayag said the situation of Occidental Mindoro prompted the commission to implement such rules as OMCPC, being the lone power provider of the province, has caused difficulties in their electricity conditions.

“Dahil sa mga shortcomings, lapses ng supplier, [at] hindi siya nagko-comply, taumbayan ho ang nahihirapan. Hindi dapat na mangyayari yun,” said Tayag in reference to OMCPC.

“Kapag iisa ang power provider, kapag hindi siya nakakakolekta ng subsidiya niya, bigla niyang papatayin ang kuryente. Wala tayong [ibang] mabilhan. May pambili tayo, pero wala kang mabilhan ng kuryente,” she added. 

(Due to the supplier’s shortcomings, lapses, and non-compliance, consumers are the ones suffering. This shouldn’t be the case. If the sole power provider cannot collect its subsidies, it may cease electricity supply, leaving us with no alternative. Although we have the funds, there is nowhere to purchase electricity.)

Unlike Occidental Mindoro, Oriental Mindoro obtains its power supply from six bilateral contracts with independent power producers (IPPs).

The Occidental Mindoro provincial board has urged OMECO to expedite not only the submission of its documents for the joint application but also accelerate their competitive selection process (CSP) to allow for at least one additional power provider, aside from OMCPC, to enter and supply electricity to the province.

Meanwhile, OMECO President Eleanor Costibolo said the definition of monopoly in this context should be examined. She argued that distribution utilities, such as OMECO, are “natural” monopolies due to their exclusive franchises in a given area – distinct from the situation of OMCPC, which is the sole power provider for the province. – Rappler.com

Chris Burnet Ramos is an Aries Rufo fellow.

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