Cebu II Electric Cooperative, Inc. (CEBECO II) has terminated its contract with PowerSource Philippines, Inc. (PSPI) due to inadequate power service in Malapascua Island in Daanbantayan.
In response to a clear power emergency, the Cebu Provincial Government will apply with the Department of Energy for it to be allowed to take over as the power generator to ensure reliable power supply to this world class tourism destination.
The contract termination follows a Dispute Notice served by CEBECO II to PSPI for failing to meet the service standards required under their agreement.
PSPI has been Malapascua’s electricity service as a Qualified Third Party since 2009. While CEBECO II is the exclusive franchise holder in the island, as well as other towns in the fourth and fifth districts of Cebu, it has waived it right to provide service in Malapascua in favor of PSPI, declaring Malapascua as a remote and unviable area.
The Dispute Notice, issued in accordance with the terms outlined in the Waiver Agreement, highlighted several breaches by PSPI, including failure to supply the required electricity load and deliver quality, efficient, and reliable service.
Investigations led by CEBECO II General Manager Engr. Lowell Belciña revealed that PSPI has been unable to meet the 220-kilowatt load requirement of the island since 2019.
Current CEBECO II report indicates that the actual load needed in the island is already 1.5 megawatts, far exceeding PSPI’s capacity. Frequent power outages and insufficient service have prompted numerous complaints from residents and business owners in Malapascua Island.
Meetings held at the Capitol, including one on July 3, revealed that more than half of the area’s consumers have been seeking explanations from PSPI for the frequent outages. Additionally, commercial establishments were often asked to use their generators without compensation, further straining relations.
Given Malapascua’s status as a top tourist destination, the power outages have had significant negative impact on local tourism and business operations. In light of PSPI’s failure to perform its obligations in good faith, Cebu Provincial Capitol, with the support of DOE and CEBECO II, will step in to stabilize the power supply on the island.
In May, the Capitol delivered to Malapascua four sets of 500 KVA generators capable of supplying 2 megawatts, enough to cover the island’s peak power demand.
A memorandum of agreement is slated to be signed to formalize the new arrangement, marking a significant step towards ensuring a stable power supply for the island and supporting its economic growth. | JT