Aboitiz unit Therma South suspends supply to Davao co-op

By Carmelito Q. Francisco – October 25, 2018 | 10:59 pm
from Business World

Therma South power plant


DAVAO CITY — Therma South Inc. (TSI), a subsidiary of Aboitiz Power Corp. (AboitizPower), said it suspended its delivery of power to the Davao del Norte Electric Cooperative, Inc. (Daneco) starting Sept. 1, claiming the co-op owes it P256 million.

In a statement, AboitizPower said part of the unpaid amount represents penalties and interest since 2016.

“As much as we want to help provide power to the member consumers of Daneco, we also have to make sure that our capability to serve our other customers in Mindanao is not affected,” said AboitizPower Assistant Vice-President Benedick M. Salvador.

The company said it will resume the delivery of the contracted 15-megawatt (MW) monthly supply to the cooperative “once all outstanding obligations including the required security deposit are paid and covered.”

Daneco is one of the 23 distribution utilities that contracted power from the 300-MW TSI coal-fired power plant in Davao, which started operating in 2015 during the power crisis in Mindanao.

The cooperative, which has total debts of P2.1 billion to various suppliers, has yet to make a statement on the TSI cancellation.

In July, Mario Angelo M. Sotto, National Electrification Administration (NEA) project supervisor for Daneco, said the cooperative will be able to pay its debts within the next two years.

NEA has assigned a group to supervise the cooperative following a management dispute involving two factions, one aligned with NEA and the other with the Cooperative Development Authority (CDA).

The two groups were both asserting the right to collect monthly fees from consumers. The Court of Appeals has ruled in favor of NEA. NEA Administrator Edgardo B. Masongsong earlier said the CDA-affiliated group can only account for about 5% of the 197,880 household connections.

Mr. Sotto said that in May, Daneco’s collection efficiency hit 98%.

A March report from the cooperative, a copy of which was obtained by BusinessWorld, showed collection efficiency was 61% and systems losses were at 20.1%, above the 13% maximum level allowed for cooperatives.