July 29, 2007


Northwind should speak up!

The never ending story on the rising cost of power has become a daily woe to power consumers whether or not they have the capacity to pay. The power situation cuts right through the pockets of power consumers who are burdened with unrelenting high cost of electricity. The government, aware that the power situation has become a recurring problem, has conceded that there is a need to amend the Electric Power Industry Reform Act (EPIRA) which was designed to empower consumers more than the power producers.

President Macapagal-Arroyo has already asked Congress to introduce amendments to the law noting the need to open up access to the power industry so that more independent power producers could participate in the market by setting more power plants that could arrest the high cost of energy.

Following the law on supply and demand, the limited number power produced in the country is contributory to the high cost of power. The lesser the power supply, the higher the cost of buying it for the increasing number of users.

In Ilocos Norte alone, there is wisdom in the claim of some business sectors that the presence of the wind power plant has not allayed the cost of electricity. The wind farm was designed to reduce the cost of power sold by the Ilocos Norte Electric Cooperative to its consumers by seven percent, which is lower than prevailing rates of the National Power Corporation.

INEC is buying power from various sources namely the NPC, the wind power plant and from the spot market otherwise known as the Wholesale Electricity Spot Market.

INEC has a standing energy sales agreement with the Northwind Power Corporation, which owns the wind farm, to the effect that all the energy produced from the wind farm should be sold to INEC.

However, from the day the Northwind company started feeding power to INEC, there has been no visible reduction of power cost. This is the question that begs a lot of answers from both INEC and Northwind.

INEC officials say Northwind has reneged on its obligation to supply the power that the latter has promised to deliver. Records from INEC showed that Northwind has been falling short in its power delivery to the cooperative forcing the latter to go to other power producers to close the gap left by the shortage of power supply caused by Northwind.

Considering these claims by INEC there should now be a need to revisit the sales agreement entered into between the cooperative and Northwind. The law provides that a party to a contract is allowed to reconstruct the agreement when the conditions set were not complied with. In cases of non-performance of obligation as set forth in the contract, then the contract itself could be rescinded or make the erring party accountable for its failure to comply.

The tragedy in all of these is that Northwind had remained deaf and blind to the issues that have been validly raised in various public fora.

Again, we ask Northwind to defend itself and not to rely on others to come to its rescue.

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Northwind should speak up!

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