Electricity crisis looms in Iloilo on unresolved cooperative franchise

MANILA, Philippines — Iloilo is at risk of a power crisis if the franchise of the existing power utility in the island is not renewed and is instead given to a new applicant without infrastructure, according to the country’s umbrella group of private power distributors.

In a letter sent to the House committee on legislative franchises, the Private Electric Power Operators Association (PEPOA) opposed the franchise application of a new applicant contesting the renewal bid of the current utility firm Panay Electric Co. (PECO) that has been operating in Iloilo City for nearly a century now.

“We are shocked to learn of the hasty approval of the franchise application of More Minerals Corp. (MMC) to the detriment of the incumbent distribution utility Panay Electric Company (PECO),” PEPOA said in a letter to Rep. Franz Alvarez, who chairs the committee.

“This development is deeply concerning to us as it puts a highly urbanized city like Iloilo at risk,” the letter stated.

PEPOA president Ranulfo Ocampo said MMC is primarily a mining company, hence, does not have the technical capability to operate and maintain a power distribution utility.

“Even if MMC were to change its primary purpose into power distribution, no company can get the required experience and qualifications in just a few days,” he said.

According to Ocampo, who is a lawyer by profession, MMC does not have the track record or the experience in running an electric distribution utility.

On the other hand, PECO has been in the business for 95 years now and belongs to the top performers in the country, as public records show that its System Average Interruption Frequency Index (SAIFI) was among the top in the country.

“They (PECO) are among the top 15 percent in terms of positive reliability performance compared to the other 146 electric distribution utilities in the country,” Ocampo said.

He also brushed aside allegations of mounting consumer complaints over erroneous billings against PECO, saying official records at the Energy Regulatory Commission (ERC) indicating such complaints comprised a negligible 0.01 percent of PECO’s more than 60,000 customers.

“This is not something new to the industry and is certainly not sufficient  basis for withholding the franchise renewal of PECO,” Ocampo said.

The PEPOA official maintained that renewing PECO’s franchise would guarantee a stable power supply in Iloilo City.

Conversely, favoring a new company with no existing utility infrastructure would put the city at great risks.

“Moreover, it will result to a duplication of distribution utilities and will be a total waste of scarce resources,” Ocampo said.

He said the duplication would ultimately redound to higher power rates in Iloilo City to the prejudice of the consumers.

“Such a scenario is inefficient and has never been done in the history of the Philippines,” he said.