DBM releases P1.6B to avert power shortage in SPUG areas

M a l a c a ñ a n g h a s

a p p r o v e d t h e

immediate release of

P1 . 6 2 b i l l i o n t o t h e

N a t i o n a l P o w e r

Corporation, in a bid

t o p r e v e n t a n

i m p e n d i n g p o w e r

shortage in the farflung islands and other off-grid areas

b e i n g s e r v i c e d b y t h e S m a l l P o w e r

U t i l i t i e s G r o u p , t h e m i s s i o n a r y

electrification arm of National Power.

Budget Secretary Florencio B. Abad said the

fund release was made by the Department of

Budget and Management upon the instructions

of President Benigno C. Aquino III himself. Of

the total amount, P1.32 billion will be earmarked

for the fuel and lube requirements of SPUG until

December 2011. Another P140 million will go to

the rental or lease of generator sets in some

SPUG areas, while the remaining P162.5 million

will be allocated for the purchase of spare parts

for SPUG plants, which represent roughly 50

percent of National Power’s unfunded capital

expenditure requirements for 2011.

“The P1.62 billion was immediately released

by the government to urgently address the

National Power’s capability to provide stable

power supply in off-grid areas, some of which

have already experienced sporadic brownouts

due to fuel supply constraints,” Secretary Abad

said.

“ F u r t h e rmo r e , t h e g o v e r nme n t i s n ow

preparing for its next steps in ensuring stable

and affordable power supply to remote areas,”

he added, noting that a fund release for the sitio

electrification project is now being processed.

To recall, National Power had earlier warned

that fuel supply is running low in several SPUG

power plants, resulting in rotating brownouts and

raising prospects that the Corporation may be

forced to stop operating altogether in several

SPUG areas. The fuel problem stemmed from a

too-tight budget, with National Power hardDBM releases P1.6B to avert

power shortage in SPUG areas

pressed to fund its fuel requirements in the

SPUG areas and owing diesel suppliers roughly

P700 million as of end-July.

For hi s par t , Nat ional Powe r Pr e s ident

F r o i l a n A . T a m p i n c o w e l c o m e d t h e f u n d

infusion, saying it will ease National Power’s

present financial difficulties and address the

Corporation’s fuel situation. “We got another shot

in the arm, so to speak,” newspapers quoted the

President as saying. “This is something we will

utilize to tide us over until the end of the year.”

The fund release will be sourced from the

Malampaya Gas Fund, which consists of royalty

fees paid to government for the use of natural

gas from the Malampaya fields in off-shore

Palawan. Earlier this year, National Power also

received an infusion of P2 billion from the said

fund, as reimbursement for advances it had

made for the upkeep of the mothballed Bataan

Nuclear Power Plant.

B y N a t i o n a l P o w e r ’ s e s t i m a t e s , i t h a s

a d v a n c e d r o u g h l y P 4 . 3 7 b i l l i o n f o r t h e

p r e s e r v a t i o n o f t h e BNP P f r om 1 9 8 6 t o

December 2010. The two fund infusions made

to SPUG this year bring to a total of P3.6 billion

the amount that has been released to National

P owe r f r om t h e Ma l amp a y a Ga s F u n d a s

reimbursement for its BNPP advances.