ERC approves SREC’s off-grid deal in Palawan


THE Energy Regulatory Commission (ERC) said on Wednesday it has approved the application of Sabang Renewable Energy Corporation (SREC) to provide electricity to an off-grid village in Palawan.

The ERC said it approved on October 5 SREC’s application for authority to operate as a qualified third party (QTP) in Barangay Cabayugan, Puerto Princesa City, Palawan and correspondingly, its QTP service and subsidy agreement (QSSA) with the National Power Corporation (NPC).

The approval means that SREC may now provide access to electricity by some 600 households, 50 small hotels and business establishments and two mid-sized hotels in the Sabang-Cabayugan area.

The approval “will benefit the residents and establishments located in the Sabang-Cabayugan area by providing a long-term and strategic solution involving a private-public partnership and by offering an eco-friendly solution to their power woes,” ERC chairman and CEO Jose Vicente B. Salazar said on Wednesday.

Barangay Cabayugan was chosen as a QTP service area by the City Government of Puerto Princesa due to increasing economic activities driven by eco-tourism in the adjacent Puerto Princesa Subterranean River National Park in the Sabang area.

The Sabang-Cabayugan area was declared as an unviable area and open for provision of electricity service by a QTP, through a board resolution issued by Palawan Electric Cooperative, Inc. (PALECO) on 26 November 2013.

On 8 April 2015, the QSSA was signed and executed by and between SREC and NPC followed by the execution of a waiver agreement between PALECO and SREC, PALECO waived the right to provide electricity service in the QTP service area in favor of SREC.

The waiver formally authorized SREC to plan, design, build, own and operate a hybrid (solar photovoltaic/diesel) power plant and a micro power grid.

The hybrid power plant will be composed of 1.4 MWp (megawatt-peak) solar PV, 2.3 MWh (megawatt-hours) storage batteries (clean type) and 4 x 320 kW (kilowatt) diesel generators while the micro grid will be composed of 14 circuit-kilometers of a 13.2 kV (kilovolt) distribution facility with a total capacity of 1.5 MVA (mega volt amp) of distribution transformers.

The village of Cabayugan currently runs its own system of electrification using diesel generation. Two large hotels are fully run on diesel generators, while all other small businesses and individual households are limited to the available power through shared generators for 4-6 hours per day at a relatively high cost per unit of electricity.

SREC’s application was approved subject to certain conditions, including: 1) SREC shall use the ERC-applicable rates (Full Cost Recovery Rate); 2) The total blended monthly full cost recovery rate shall be determined based on the actual energy mix of solar and diesel; 3) The pass-through fuel cost shall be subject to the actual fuel consumption rate or the approved efficiency cap whichever is lower and; 4) The subsidized approved retail rate shall be charged to SREC’s end-user.

In addition, SREC shall be allowed to recover the subsidy from the ERC-approved Universal Charge-Missionary Electrification (UC-ME), and SREC shall submit its audited financial statements for the first full year of commercial operation and the final independent engineer’s report.

Finally, SREC shall submit, after seven years, a revised tariff scheme and a proposed revised subsidized and approved retail rate.


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  1. Build a natural gas fired power plant and all of Palawan’s electric woes would be resolved. I mean, it is 2016 and daily brownouts still are occurring. No excuse for Paleco’s failed management and lack of service.