THE municipality of Pagbilao in Quezon province revoked the cease and desist order (CDO) it issued against Pagbilao Energy Corp. (PEC), resulting in the dismissal of the case between the Aboitiz Power Corp. (AboitizPower) unit and the town officials.

“The revocation of the CDO means that PEC is not barred from proceeding with the scheduled commercial operations of its power plant,” the listed power generation and distribution company told the stock exchange on Wednesday.

The municipality canceled its order on March 7, 2018. In a hearing on the same date, officials of Pagbilao and PEC moved for the dismissal of the case, which the court granted.

Based on data from the Department of Energy (DoE), PEC’s 420-megawatt (MW) coal-fired power plant project had undergone testing and commissioning in August 2017. It was scheduled to start commercial operation in January 2018.

“PEC is working with the Municipality of Pagbilao for the issuance of its business permit, and also on the few remaining steps necessary before the start of the PEC plant’s commercial operations,” AboitizPower said.

The PEC plant is one of several scheduled to go online this year. The DoE is banking on the facility’s capacity to answer the expected increase in power demand this summer, thus preventing the occurrence of “yellow alerts” or situations where power reserves have thinned, usually a precursor to a power interruption.

Pagbilao officials issued the CDO as the company was applying for a business permit for calendar year 2018.

AboitizPower said the municipality required PEC to execute a memorandum of agreement (MoA) implementing its corporate social responsibility programs for an amount above the company’s approved budget.

AboitizPower said the municipality refused to issue the business permit without the executed memorandum, and instead issued the CDO against the operations of the company’s power plant in Pagbilao.

PEC then filed the application for injunction and obtained a temporary restraining order from Branch 57 of the Regional Trial Court of Lucena City, preventing the municipality from implementing what the company believes to be an unwarranted CDO.

PEC maintained the execution of the MoA is not part of the published and legal requirements for a local business permit.

The listed company said the PEC plant had received all the required endorsements from the local government units, namely: the Quezon provincial government, the municipality of Pagbilao, and the host barangay of Ibabang Polo.

It added all clearances and endorsements from national government agencies, such as the Department of Energy, and the Department of Environment and Natural Resources, among others, had been secured.

PEC is a joint venture company between Therma Power, Inc. and TPEC Holdings Corp. Therma Power, a wholly owned subsidiary of AboitizPower, is the holding company of its investments in non-renewable energy.

AboitizPower said the potential delay in the commercial operations of PEC’s power plant would render it unable to perform its commitments to its suppliers, customers, and to the Luzon grid. — Victor V. Saulon