DMCI keen on Napocor’s SPUG areas

Firm to join as many auctions as possible


10:14 PM January 2nd, 2012

By: Amy R. Remo, January 2nd, 2012 10:14 PM

THE CONSUNJI-led DMCI Power Corp. plans to participate in the planned privatization of the 12 areas under Small Power Utilities Group (SPUG), which will soon be offered by the state-run National Power Corp. (Napocor).

DMCI Power chairman Isidro Consunji confirmed that the company’s focus this year would be on the SPUG areas, the bidding for which will begin in the first quarter.

Of the 12 areas to be offered for bidding, Napocor plans to start off with the SPUG areas in Mindoro and Palawan. These will be followed by the areas in Catanduanes, Romblon, Tablas and Siquijor.

The more difficult SPUG areas, which include Sulu, Tawi-Tawi and Basilan, will be put up for bidding in the latter part of the year.

By bidding out these areas, private sector investors like DMCI Power will be allowed to build, own and operate generation facilities to supply electricity to the missionary, or far-flung, areas that are not connected with any of the existing main grids.

The privatization of SPUG areas was meant to bring down power rates for customers serviced by the main grids who shoulder part of the cost of the subsidy program for these areas. The subsidy is charged to main grid customers through the universal charge for missionary electrification (UCME) component in their power bills.

At present, SPUG, which is Napocor’s missionary electrification arm, provides electricity to remote islands and far-flung, inland barangays (village).

Napocor had said it needed as much as P19 billion this year to support SPUG operations, but only P15 billion was approved by the Congress.

Napocor president Froilan A. Tampinco earlier expressed confidence that the bidding round this year for the SPUG areas would be more successful than Napocor’s previous attempts because of the involvement of more government agencies.

“The different agencies are working closely. Now we have the National Electrification Administration (NEA) on board. NEA’s participation is crucial to ensure the participation and cooperation of electric cooperatives which, in a lot of areas, are the root of the problems encountered by bidders,” he said earlier.

He added that the Department of Energy (DoE) was also taking a more active stance as it would act as the overall coordinator that would ensure that the competitive bidding process was properly conducted.

Also, the DoE will help ensure that participating parties know what their obligations are.

According to Tampinco, Napocor had successfully privatized SPUG operations on Bantayan Island and Masbate.

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