Long wait for CapEx approval over; reliable power in sight for Palaweños
The long wait was finally over for the Palawan Electric Cooperative (Paleco) after getting the green light to implement its five-year capital expenditures (CapEx), majority of which are geared to meet the demand of Palaweños for more stable and reliable electricity in the province.
Twenty-five CapEx projects out of the 29 applied for by Paleco for the years 2017 to 2021 were approved by the Energy Regulatory Commission (ERC) in the total amount of P1.082 billion, lower from its P1.161-billion original submission. Four proposed projects were disapproved.
“The Application filed by Palawan Electric Cooperative for approval of its capital projects for the years 2017 to 2021 and for authority to secure loan, with prayer for provisional authority, is hereby resolved,” the ERC stated in its decision dated November 6, 2018, and docketed on December 7, 2018.
Paleco filed its application for CapEx approval on May 9, 2017.
Among the approved CapEx projects were the installation of two new 5 MVA substations in Puerto Princesa City, and a Supervisory Control and Data Acquisition (SCADA) System. Also included were the acquisition of several major equipment, such as distribution transformers, kilowatt-hour meters, low voltage conductors, and service drop wires.
Paleco was directed by the ERC to conduct competitive biddings for the purchase of major materials in the implementation of its CapEx projects. It was also authorized to secure a loan amounting to P263.708 million to finance its projects.
The power distribution utility intended to avail of loans from the National Electrification Administration (NEA) to finance several of its proposed projects. The proposed loans shall be paid within 15 years with an annual interest rate of 6 percent.
Welcoming the approval of the CapEx, Paleco Project Supervisor and Acting General Manager Engr. Nelson Lalas said they would prioritize the implementation of the projects that would immediately contribute to the improvement of the electricity service to Palaweños, such as the installation of new substations and SCADA system.
Power assessment
Palawan’s grid has an installed dependable generating capacity of 84.9 megawatts (MW), sufficient to supply the province’s power demand of 46 MW. This is on top of the 7.4 MW for its off-grid. But the frequency of power interruptions has been a cause of concern for Palaweños since 2017.
This concern is part of the issues that the NEA wants to address. Therefore, on December 10, 2018, the agency assigned a project supervisor and acting manager to oversee the operations of Paleco. This was following Malacañang’s directive to solve the province’s power woes.
Immediately upon assumption of office, Lalas conducted an initial assessment of the current power situation in Palawan. In his report submitted to the NEA, Lalas attributed the frequent power outages to a number of factors, including failures in generation, transmission and distribution systems.
Lalas said the occurrence of frequent line faults were due to frequency, voltage and some dilapidated generator sets owned by the power suppliers. He also identified trees or other vegetation near the power distribution lines of Paleco as the major contributor to outages.
To address this issue, Paleco has intensified the conduct of right-of-way clearing in its entire coverage area, which will finish in February this year. At present, the power utility has completed 60 percent of the total vegetation areas subject for clearing.
“The ongoing massive clearing of trees in the entire coverage area has a big impact in reducing line faults. To date, frequent distribution line trippings have been reduced,” Lalas, in his assessment report, said.
Power outages were also partly caused by the existence of undersized and old backbone line conductors, substandard utility poles with uncoordinated sectionalizing devices and poor grounding system.
To ensure that the supply of Paleco’s energy requirements is reliable and adequate, Lalas also met with the three power producers namely, DMCI Power Corp., Delta P Inc., and Palawan Power Generation Inc., as well as the National Power Corp. – Small Power Utility Group (NPC-SPUG).
“[We discussed] problems about the dispatch and as regards the protocol. I also emphasized during that meeting that the power interruption is not only [a problem of] Paleco but theirs as well,” Lalas said.