By By Fernan A. Gianan
Who will have the balls to change the ESAs?
posted 8-Jul-2018  ·  
763 views  ·   0 comments  ·  

It appears that Engr. Raul Zafe, who has been appointed Acting General Manager of the beleaguered First Catanduanes Electric Cooperative, Inc. (FICELCO), is serious about his job.

After being greeted with no less than 11 brownouts on his first day in office, the new GM has begun efforts to reduce unscheduled power outages to a tolerable level, one brownout at a time.

Last week, on the strength of a directive from the Board of Directors led by President Alex Ang Hung, Engr. Zafe has started the procurement of the necessary materials for the upgrading of the tie line from Balongbong mini-hydroelectric power plant to the Marinawa substation.

Built at least 15 years ago to carry the load from Balongbong, the five-kilometer power line is seriously overloaded after the cooperative allowed Sunwest Water & Electric Co. (SUWECO) to directly connect its 2.1-megawatt Solong mini-hydro plant, and later the 5-megawatt diesel power plant, to the Balongbong tie line.

This, GM Zafe states, is the reason for most of the brownouts as the tie line he designed for 2-MW load is bow burdened by a total load four times as much. The overloaded line overheats, results in undervoltage of as low as 180 volts and affects the synchronization of the various power plants supplying the island grid, he says.

FICELCO sources blame the situation on the board of directors which presided over the approval of the Electricity Supply Agreement (ESA) with the private supplier. Instead of requiring the company to build a separate, dedicated tie line from Solong to Marinawa, the board allowed it to tap the existing tie line at Balongbong.

Most unfortunately, the then FICELCO management failed to conduct a Distribution Impact Study (DIS) prior to procuring the new power supply contract and even before allowing its connection to the grid. No DIS was conducted for the initial ESA and even for the 1st and 2nd amendments, they said.

The lack of the required DIS is just one of the things wrong with the ESA the previous directors signed with both SUWECO and the Catanduanes Power Generation, Inc. (CPGI), proof of their lack of diligent review of the contracts.

GM Zafe confirms that both power contracts do not have penalty clauses, meaning the buyer of electricity cannot impose penalties on the suppliers for any failure to deliver the contracted electricity as what has actually happened. The strange thing also is that both ESAs have confidentiality clauses, evidence that from the outset the parties sought to keep some things from the consuming public.

As it is, CPGI is already in violation of its ESA for failing to deliver electricity to the cooperative following the National Power Corporation’s decision not to renew the lease of the 3.6-MW diesel genset. On the other hand, it is claimed, SUWECO is also in violation of its ESA, for its certain failure to deliver the Capipian minihydroelectric power plant by the end of 2018, as construction should have begun three or four years ago.

    With the current board of directors reportedly set to join SUWECO in applying with the Energy Regulatory Commission (ERC) for approval of the 2nd Amendment, who will have the balls to sue all parties regarding the ESA violations, the lack of a penalty clause, and the obvious preference for the current supplier to deliver any future demand, to the exclusion of other, cheaper and cleaner energy?

*****

    As an old hand at FICELCO, GM Zafe obviously understands what the coop needs to deliver adequate service to the consumers. He would need the full support of the board of directors.

*****

APPLIED PSYCHOLOGY. A man bought a new refrigerator for his house. To get rid of his old fridge, he put it in the driveway and hung a sign on it saying: “Free to good home. You want it, you take it.”

For three days, the fridge sat there without even one person looking twice at it.

Eventually, he decided that people were too suspicious.

It looked too good to be true. He changed the sign to read: “Fridge for sale, $50.”

The next day, someone stole it.


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