Napocor eyes Catanduanes plants to supply power in off-grid areas

MANILA, Philippines - State-run National Power Corp. (Napocor) may tap Sunwest Water and Electric Co. Inc. (Suweco) for the electricity requirements of the Small Power Utilities Group (SPUG), the power provider in off-grid areas.

Napocor president Froilan Tampinco said Suweco is an ideal choice because it provides cheaper power generated from renewable energy (RE) sources.

“I would recommend renewable energy for SPUG areas, for as long as their equivalent generation costs would bring about a net lowering in the existing subsidy,” Tampinco said.

Catanduanes=based Suweco has three small hydropower plants that generate a total of 6.4-megawatts (MW). It currently has a supply contract with the First Catanduanes Electric Cooperative (Ficelco).

To date, Suweco has completed one of its three planned projects – the 1.5-MW Obi small hydropower plant. 

During a recent House Committee on Energy meeting, the Napocor executive pointed out that they are spending a lot of subsidy for their SPUG plants as the cost of generating power is higher than the socially-acceptable power rate.

“In Catanduanes, the generation cost is P13 per kilowatt-hour (kwh) while the socially accepted rate is only P6.60 per kwh,” he said.

 Moreso, he said the subsidy is sourced from the universal charge for missionary electrification that consumers pay to power retailers like Manila Electric Co. (Meralco), which are remitted to the Power Sector Assets and Liabilities Management Corp. (PSALM) and then given to Napocor.

Suweco’s cost of generating power is P5.39 per kwh, which it sells at P5.70 per kwh.

In Catanduanes, the government generates savings of up to P110 million every year in terms of subsidy because of Suweco’s small hydropower plants.

“Catanduanes is the showcase of all the SPUG areas. It’s a success story in the making with respect to having clean affordable source of energy,” Tampinco said.