Republic of the Philippines

PROVINCE OF ORIENTAL MINDORO

City of Calapan

SANGGUNIANG PANLALAWIGAN
COMMITTEE REPORT NO. 171 - 2011
------------------------------------------------------------------------------------------------------------------------------SUBMITTED BY:
COMMITTEE ON POWER AND ENERGY
SUBJECT:

MANIFESTATION OF HONORABLE BOARD MEMBER MARTIN S.

BUENAVENTURA DURING THE 51ST REGULAR SESSION OF THE
SANGGUNIANG PANLALAWIGAN OR ORIENTAL MINDORO
RELATIVE TO THE FREQUENT OCCURENCES OF LONG BROWNOUTS IN THE PROVINCE, PARTICULARLY IN THE SECOND
DISTRICT

FOR:
THE HONORABLE PRESIDING OFFICER
------------------------------------------------------------------------------------------------------------------------------Dear Honorable Presiding Officer:
The above subject was referred to the Committee on Power and Energy of
Sangguniang Panlalawigan of Oriental Mindoro on June 30, 2011. Due to
significance of the said matter to the lives of the people of Oriental Mindoro,
Committee conducted a hearing on 07 July 2011, which was attended by
following:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.

the
the
the
the

Hon. Romeo G. Infantado, Committee Acting Chairperson;

Hon. Ryan Z. Arago, Committee Member;
Hon. Ramil O. Dimapilis, Committee Member;
Hon. Martin S. Buenaventura, Committee Member;
Hon. Gideon B. Abuel, Committee Member;
Hon. Abraham R. Abas, Guest Committee Member;
Atty. Kristine Grace L. Suarez, Provincial Legal Officer;
Representatives from ORMECO, headed by Mr. Audel Arago, President BOD
of ORMECO;
Representatives from National Power Corp. Oriental Mindoro, headed by
Engr. Maximo Delos Reyes, NPC-SPUG Superintendent; and
Staff from Provincial Information Office.

This Committee has the honor to report before this Honorable Body the
outcome of the said legislative undertaking after thorough deliberation of the issue
at hand, to wit:
1. That, the ORMECO is dependable on the following power sources: (a)
Dulungan Mini-Hydro Power Plant (1.6 megawatts); (b) National Power
Corporation (NPC)-Agrekko Calapan (17.0 megawatts); (c) Mirant/Global
Philippines in Pinamalayan (6.0 megawatts); and, (d) NPC-Agrekko stationed
in Mamburao, Occidental Mindoro (4.0 megawatts), with a total power load of
28.6 megawatts.
2. That, according to representatives from ORMECO the current power
interruptions being experienced provincewide were attributable to the
implementation of Annual Preventive Maintenance of transmission lines and
power generators of NPC and Mirant/Global Power Corporation as well as the
implementation of System Load Reduction Program of the NPC.

3. That, the schedules of power interruptions due to the implementation of

Annual Preventive Maintenance were the following:
a. July 2 and July 3, 2011 from 7:00 A.M. 5:00 P.M. affecting the areas
covered by the NPCs NPC 69KV Transmission Line to wit: Naujan,
Victoria, Socorro, Pola, Bansud, Bongabong, Roxas, Mansalay and
Bulalacao.
b. July 5, 2011 from 7:00 A.M. to 5:00 P.M. affecting the areas covered by
the NPCs 50MVA Substation, to wit: Calapan City, San Teodoro and
Puerto Galera.
4. That, notably, it was revealed that the Annual Preventive Maintenance of the
NPCs 50MVA Substation in Calapan City was not conducted for reason that
the NPCs technical crew did not arrive on the scheduled date. Thus, said
preventive maintenance will be re-scheduled to other date.
5. That, during the hearing, it was disclosed that even if the preventive
maintenance schedules were already concluded, power shedding would still
continue because of the System Load Reduction Program of the NPC. Said
program is being implemented by the NPC because of its critical inventory of
fuel.
6. That, likewise, due to the said critical inventory of supply of diesel for power
generators, the 4.0 MW of the NPC-Agrekko stationed in Mamburao was not
supplied and the power supply from Mirant/Global was trimmed down by 2.5
MW. According to the NPC, bidding for supply of diesel for their power
generators in Mamburao, Occidental Mindoro failed, thus aggravating the
situation. Per manifestation of Engr. Maximo Delos Reyes from NPC, their fuel
allocation for April to June can be stretched out until July 5, 2011. For the
third quarter, fuel allocation for the NPC Oriental Mindoro was already bid
out but, unfortunately, it covers only the months of July and August, as the
NPCs daily consumption of diesel amounts to 98,000 liters for the 28.6 MW
covering the areas from Calapan to Bulalacao. The NPC-Oriental Mindoro
warned that, worst come into worse, when fuel allocation for NPC-Oriental
Mindoro will not realize on schedule, its power generators will all be shutting
down consequently total power black outs may happen probably in
September and would last until said problem has been properly addressed.
7. That, responding on the query of Honorable Martin S. Buenaventura why the
NPC did not make accurate projection for the yearly consumption of fuel of
their power generators, Engr. Delos Reyes clarified that the NPC-Oriental
Mindoro religiously prepared and submitted the same however it was the NPC
National Office who trimmed down their fuel allocation due to budgetary
constraint. He said that problem on fuel allocation were being experienced
not only by NPC-Oriental Mindoro, but also of all the provinces nationwide
under the NPC-Small Power Utilities Generation. He also revealed that NPCOriental Mindoro is receiving the highest fuel allocations per year among all
the NPC-SPUG nationwide.
8. That, the problem on fuel allocations for the NPC-SPUG begun when the
Universal Charge collected from power consumers was decreased from P0.90
to P0.45.
9. That, the NPC-SPUGs stay in the province for its missionary electrification
has been long overdue as its supposed phase out was scheduled since 2004.
Such delay was due to the fact that sufficient and new players in power
generations in the province have not yet been assured.
10.That, on the query of the Honorable Ramil O. Dimapilis on the possibility that
the Provincial government would make advances to ORMECO for its electricity
consumption, which in turn the amount for such will be used to purchase the

fuel allocation of NPC so as to forestall the looming problem on the supply of

electricity, Atty. Kristine Grace L. Suarez said that such scheme may be
allowed emphasizing its significance on the socio-economic condition of the
province and its people. However, fuel allocation for the NPC Gen Sets
covering one month period is amounting to Four Hundred Million Pesos.
11.That, the ORMECO, in anticipation to the NPC-SPUG phase out in the province,
is forging power supply agreement with qualified independent power
producers such as the ORMIN Power Corporation. ORMECO BOD President
Audel Arago disclosed that agreement between the Cooperative and Ormin
Power Corporation underwent Competitive Selection Process and as such the
production cost of P13.0 by Ormin Power will be reduced to P6.98 per
kilowatt-hour. The remaining production cost will be subsidized by the NPC as
provided for under the Electric Power Industry Reform Act (EPIRA). In that
way, BOD President Arago surmised that the said power supply agreement is
advantageous to ORMECO and its member-consumers. He also revealed that
under the agreement the Ormin Power will provide 6.4 MW with its four brand
new modular generator sets, which are all ready for transit to the province.
He also said that the said corporation successfully secured provisional
authority from the Energy Regulatory Commission (ERC) for a period of six
months subject to compliance on the requirements imposed by the said
Commission. According to him, failure on the part of the Ormin to comply
with those requirements imposed by the ERC, ORMECO is ready to terminate
their agreement with said corporation.
12.That, the installation of four modular generator sets of Ormin Power is
expected to be concluded by the end of September 2011 and shall be
generating electricity after one month of test run. In such case, it cannot be
the immediate solution to the looming problem of total power black-out in the
entire province in case supply of fuel for NPCs gen sets remains unsolved
until August 30, 2011.
13.That, clarification was made regarding the Linao-Cawayan Mini-Hydro Power
Plant Project. ORMECO representatives disclosed that the said project is still
being implemented, which is funded through DBP loan, and is almost 85%
complete. According to them, what has been dissolved was the LinaoCawayan Mini-Hydro Power Plant Corporation, which was registered under the
names of ORMECO Board of Directors and officials the same being violative
of the EPIRA law. According to BOD President Audel Arago, they overlooked
legal implications in registering the said corporation under their names as
they only emulate the practice of other electric cooperatives. Fortunately, he
said that all the documentary requirements were accomplished under the
name of ORMECO; hence, the implementation, operation and maintenance of
said project remains under the said cooperative. He said that the LinaoCawayan Mini-Hydro Power Plant will be operating with an independent book
of accounts since it is considered power generation utility separated from the
book of accounts of the ORMECO as power supply entity pursuant to existing
law. When already operational, the power cost to be imposed by the said
mini-hydro power plant will be P5.25 per kilowatt-hour and, after the payment
of loan in 10 12 year period, the said amount will be reduced to P2.22 per
kilowatt/hour.
14.That, on the query of the Honorable Romeo G. Infantado on reason why said
mini-hydro power plant project was not offered to businessmen in the
province; BOD President Arago opined that it would be disadvantageous for
the cooperatives members-consumers to have that project be undertaken by
the private investors since they are usually profit-oriented unlike the ORMECO
which is service-oriented.
15.That, according to ORMECO the members-consumers were properly informed
of the scheduled power shedding as they provide fliers to various offices as

well as vehicles of the ORMECO with public address system were deployed
provincewide. They said that they also used local media outlets in their
information dissemination campaign.
16.That, on the issue of provincewide total power black-out, BOD President
Arago requested to the Committee for the sponsorship of SP Resolution
requesting His Excellency President Benigno Simeon C. Aquino, through the
National Power Corporation (NPC) President, to prioritize the NPC-SPUG in the
Province of Oriental Mindoro for the allocation of its required fuel supply and
to provide in the soonest time possible its fuel allocation requirements for this
years third and fourth quarters. He said that the ORMECO religiously and
faithfully settled their accounts with the NPC and yet the cooperative is still
being affected by the said problem of the NPC.
17.That, this Committee agreed that the said request has to be communicated
to the Honorable Provincial Governor who, in turn, will request the Provincial
Board for the passage of a resolution to that effect. In view of the same, BOD
President Audel Arago said that ORMECO will make such communication to
facilitate the request to His Excellency through SP Resolution.
Based on the foregoing premises, this Committee respectfully recommends to
this Honorable Body to terminate further consideration of the subject at hand and to
wait for the request of the ORMECO, to be indorsed by the Provincial Governor, for
the passage of a resolution requesting His Excellency President Benigno Simeon C.
Aquino III, through NPC President, to prioritize NPC-SPUG in the Province of Oriental
Mindoro in the allocation of fuel to ensure efficient and continuous operation of its
power generators.
(Sgd.)
HON. ROMEO G. INFANTADO
Temporary Chairperson
MEMBERS:
(Sgd.)
HON. RYAN Z. ARAGO
(Sgd.)
HON. MARTIN S. BUENAVENTURA

(Sgd.)
HON. RAMIL O. DIMAPILIS
(Sgd.)
HON. GIDEON B. ABUEL