PECO refutes Enrique Razon claims

MANILA, Philippines — Panay Electric Co. (PECO) has refuted claims of port and casino magnate Enrique Razon, saying these are exaggerated and misleading to mask his company’s bid to illegally take over the franchise to operate Iloilo’s power distribution.

“We know that we are fighting a Goliath in our quest for survival of our company, but we believe that we have the Ilonggos on our side in this fight for what is just and right,” PECO said in a statement.

PECO said it has been providing the power needs of Iloilo City households and business establishments, while Razon’s mining company Monte Oro Resources & Energy Minerals Corp. (MORE) is attempting to take over the franchise through questionable means.

PECO said it has complied with the House committee’s requirements for the franchise renewal including the endorsements of customers and the regulatory agencies, but its application has not been acted upon by Congress.

This is in contrast to MORE’s application, which it filed only on Aug. 22 and was approved by the House on Oct. 8, or less than two months after its application. 

“Mr. Razon is now resorting to feeding the public wrong information to justify his railroading in Congress that could lead to the illegal takeover.” 

Last week, Razon said Iloilo has suffered from poor services, power outages and overcharging of electricity rates under PECO, which has been the island’s power distributor for the past 95 years.

However, PECO said such is not the case as the utility has received recognition for its operation for nearly a century.

“Our company stands out among over 140 distribution utilities in the Philippines, a fact duly recognized by the Energy Regulatory Commission (ERC) when we were awarded 100 percent fully compliant in securing and ensuring reliability of power supply in our franchise area,” it said, noting only four other distribution utilities have received such award.

PECO also questioned Razon’s claim of 1,800 registered complaints against the power utility.

Citing data from the ERC, the power utility said there were only 194 validated complaints with the regulator  out of 64,000 customers, while only 25 cases, with some involving power pilferage, are pending.

As for the rates, ERC records also showed that Siquijor Electric Coop. Inc. charges P14.0763 per kilowatt-hour (kwh), making it the most expensive in the Visayas, compared to PECO’s charges of only P8.2079.

Moreover, PECO said there are 19 other utilities in the Visayas with higher rates. Visayan Electric Co. (VECO) of Cebu – the second largest power distributor in the country – charges P8.1387 per kwh, which is close to its power rate.

“Mr. Razon can easily check data from the Distribution Management Committee of the ERC regarding the electric reliability figures of the country,” it said. 

PECO also pointed out that the businessman has used different country averages for System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI), which are at 5,135.43 minutes and 40.31 incidents, respectively.

This means Iloilo City’s total SAIDI of 1,552.86 minutes and SAIFI of 31.71 are far below the national averages.  

The utility said the figures are far from what Razon claimed, which are 54 minutes for SAIDI and 2.18 incidents for SAIFI.

SAIFI is the average number of interruptions that a customer would experience, while SAIDI is used as a reliability indicator by electric power utilities.

As for PECO’s system’s loss for 2017, it was pegged at 8.37 percent or below the ERC cap of 8.5 percent. This is compared to Razon’s claim that the utility has the highest system loss among private utilities at 9.9 percent.

System loss refers to unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines, which can be passed on to consumers.

On Razon’s claim that PECO uses 95-year-old equipment, the company said it has fitted out 450 kilometers of electrical lines, 20,000 poles, and 1,300 distribution transformers that serve over 64,000 homes and businesses of Iloilo City.

“These are regularly upgraded, replaced, and added to, as system needs change,” it said.

PECO’s franchise will expire on Jan. 19, 2019.