Zamcelco’s “bankruptcy” and government neglect: the culprits of our endless blackouts PDF Print E-mail
Monday, 19 March 2018 13:39



If no immediate measures are implemented to arrest these continuous debilitating blackouts, we shall be in for a longer period of sufferings: unbearable hot temperatures and high cost of broken supply of electricity.

Being located at the far end of the Mindanao grid, Zamcelco is not being fed the right amount of electricity for distribution to its residential and commercial consumers. It is “under voltage.” To check this problem, the National Grid Corporation of the Philippines (NGCP), the nation’s transmission grid operator, asked for sufficient time to make the necessary corrections to improve the voltage and in the meantime allowed the increase of its load nomination from Western Mindanao Power Corporation (WMPC) to address Zamcelco’s “under voltage” problem, but only as a short-term solution. The long-term solution for this under voltage problem would be for the NGCP to avail of ancillary services from WMPC which NGCP has not done up to now.

Seeking to end this problem, Zamcelco Board President, Omar Sahi, wrote a letter, dated 20 February 2017, bringing this matter to NGCP of “under voltage” delivery in the 69 KV level only. As heretofore stated, a short-term/immediate solution that was jointly agreed by the NGCP, WMPC, and Zamcelco in a series of meetings held in this regard, and they agreed to address this problem by increasing our load nomination with the WMPC of which the rate is higher compared to others where we could have nominated at a cheaper cost of power.

This increase in load nomination with NMPC was only a “short-term solution” which was agreed in the technical coordination meeting with NMPC and NGCP technical personnel last 15 September 2016, in order to give NGCP the sufficient time to make the necessary corrections to improve the voltage at the load end. However, up to this date, Zamcelco is still continuously obligated to a higher load nomination with WMPC just to avoid the “under voltage” problem where the effect of such is a higher cost of electricity causing added burden to its member-consumers.

Sahi’s letter was a follow-up on the status of the ancillary services agreement between NGCP and WMPC as one of the lasting solution discussed during the meeting, believing that it will lower our electricity cost and at the same time stabilize the quality of the voltage at our receiving end. But nothing came out of this.

Solving this problem would be to buy electricity from other generators, but what can we expect from Zamcelco which is now financially incapable of doing it because of its debt, which according to my very reliable inside source, now totals to a whopping P1.5 billion. Why the cooperative has accumulated such gargantuan debt is simply due to management incompetence.

To solve this problem, an Integrated Management Contract (IMC) was bidded out and Meralco was the only bidder to take over management of the cooperative on a 60-40 sharing basis. Sixty percent (60) profit goes to Meralco and forty percent (40) goes to Zamcelco, for doing nothing and simply waiting for the payment of their percentage share. But this contract is subject to the approval of the National Electric administration (NEA), which up to now remains unapproved and left hanging in the air. In the meantime, new power generator, San Ramon Power, Inc. (SRPI) and Zamcelco, has already entered to a Power Sales Agreement that was approved by the Energy Regulatory Board (ERB) four years ago. With the approval of the IMC by the NEA, SRPI which is now waiting at the sidelines, will have to immediately finish its electricity plant to comply with its obligation to supply Zamcelco a total of 100 MW of electricity which is more that our city’s demand of 90 MW electricity and at a lower cost.

But why aren’t these plans don’t happen and implemented? This is nothing but simply total neglect and insensitivity. If the NGCP, Department of Energy (DOE) and NEA don’t act or approve all of these pending agreements immediately to end our problem of “under voltage”, our city officials like the City Mayor, Our Congressmen representing the city’s two district must help follow up this very important matter with the concerned government agencies and seek their affirmative responses. Or, follow up this matter with President Duterte. Otherwise, we will still be in for a long, agonizing series of blackouts that has raised blood pressures and caused frayed nerves to the thousands of denizens of the city and stunted the progress and development of the city.