The city of Zamboanga may experience rolling brownouts and power outages as the city’s power supplier runs out of fuel.
This was revealed in an open letter from Western Mindanao Power Corp. (WPMC), the city’s energy supplier.
In the letter published on Sunday, the Alsons-powered company revealed that Zamboanga Electricity Cooperative (Zamcelco) has delayed payments for its outstanding debt to WPMC despite the Investment Management Contract (IMC) that was approved and took effect last year.
“We have committed ourselves to continue our partnership with Zamcelco in ensuring the improvement of power supply in Zamboanga City. This is why we are concerned with the continuing delay in payments from Zamcelco,” the letter said.
Fuel constitutes 90 percent of WPMC’s and costs. The company said that the outstanding debt and and “untimely payments” over the years forced the energy supplier to advance its fuel costs to continue its service with Zamcelco for the people of Zamboanga.
As a result of the continuous delay in payments after the IMC was granted, WPMC said it can no longer maintain its operations.
“While WPMC is willing to continue operating and serving the community, we cannot pay our fuel suppliers without Zamcelco meeting its commitment to pay its outstanding debt due us,” the company said.
“At the current rate of generation, we expect to run out of fuel tomorrow (February 4). With WPMC not being able to supply to Zamcelco, there may not be enough power for the city,” the company added.
An IMC was awarded in September last year to Crown Investments for its winning bid worth P 2.5 billion.
The IMC states that the winning bidder shall make upfront payment of Zamcelco’s liability to the National Electrification Administration (NEA), under the IMC. In addition, they shall also make the payment of past due obligations to current power suppliers, with ERC-approved power supply agreements, and other terms of reference, which will run for 25 years and renewable thereafter.
Zamcelco has been suffering from a systems loss level of 23 percent, on top of P 2 billion worth of liabilities including P 1.3 billion in outstanding debt to power suppliers.
Four other bidders submitted their technical qualifications for the IMC, namely Davao Light and Power Co. of the Aboitiz Group, Nikolas Management Services Inc., Filinvest, and Comstech Integration Alliance which is 60 percent owned by Manila Electric Co. (Meralco), before it was finally awarded to a joint venture of Crown Investments Holdings Inc. and Desco Inc.