There will be no more reason for Catanduanes Power Generation, Inc, (CPGI) to blame low rates for future power interruptions caused by lack of fuel, following the recent approval by the Energy Regulatory Commission (ERC) of its Electricity Supply Agreement (ESA) with the First Catanduanes Electric Cooperative, Inc. (FICELCO).

Last July 3, the Commission approved the ESA between the two parties with some modifications and conditions, with rates slightly lower than those applied for. Last year, the ERC’s provisional approval of the ESA specified rates which CPGI found to be too low, with the total non-fuel charge pegged at P1.55 per kilowatt-hour and fuel oil charge at P0.2025 per kWh.

The approved ESA allows CPGI to charge P2.0018 per kWh as non-fuel charge, compared to P2.24 as applied, and a minimum of P0.2604 per kWh as fuel oil charge. It also permits CPGI to charge FICELCO P1.4118 per kWh has standby fee in case it is forced to remain idle in favor of mini-hydro power plants during the rainy season.

The new ESA rates will not be felt directly by the member-consumers as the generation rate to be charged to them will be the approved Subsidized/Approved Generation Rate (SAGR) of P5.6404/kWh. The difference between the SAGR and the CPGI’s True Cost Generation Rate (TCGR) of P9.15/kWh will be recovered  by the company from the National Power Corporation’s Small Power Utilities Group (NPC-SPUG) through the Universal Charge-Missionary Electrification (UCME)

According to the ERC, the government will be able to save P67 million as reduction in power generation subsidy as NPC’s true cost of generation is P12.12/kWh, or nearly P3/kWh more expensive than CPGI’s rate.

The savings, however, will be realized if CPGI delivers its contracted energy of 22.6 million kWh yearly. Records show that in 2010, CPGI supplied only 15 million kWh, or 66 percent of its contracted capacity, while last year, its energy production fell to just over 5 million kWh as its operation was affected by frequent genset breakdowns.