ERC orders PECO to explain lapses

MANILA, Philippines — The Energy Regulatory Commission (ERC) has ordered Panay Electric Co. Inc. (PECO) to explain the operational lapses uncovered by its inspection team.

PECO’s directors and officers were required to explain why no administrative penalty should be imposed and/or criminal action instituted against them for violating the pertinent provisions of the Philippine Distribution Code 2017, Amended Distribution Services and Open Access Rules, Amended Elevated Metering Center (EMC) Rules, and ERC Resolution No. 12, Series of 2009 or the Guidelines for the Accreditation of Satellite Laboratories of Meter Shops. 

“Based on the findings of the ERC technical team that conducted the ocular inspection on the electric distribution system of PECO, the latter committed lapses in the operations and maintenance of its distribution system thereby posing danger and risks to the lives and properties of its consumers,” ERC chairperson and chief executive officer Agnes Devanadera said in a statement.

The findings of the ERC inspection team showed that PECO’s protective devices were not properly rated and designed.

The ERC team said some poles were found leaning and in unsafe positions. Some meters were found to be clustered and installed in an elevated metering center (EMC) without securing prior ERC approval. 

It was further uncovered that the certificate of authority (CA) for PECO’s meter shop expired on Nov. 18, and PECO has not filed an application for the renewal of the same.

“PECO must submit its explanation within (15) days from receipt of the commission’s order pursuant to the relevant provisions of the Electric Power Industry Reform Act.  We need to accord PECO the opportunity to explain its side before we evaluate the extent of their liability for the operational lapses that were discovered,” Devanadera said.

The ERC probed PECO following the complaint filed by Iloilo City Mayor Jerry Treñas in  Malacañang against the threat to public safety by “inadequately-maintained lines, power outages and hazardous electric posts” owned by PECO.

Treñas had asked the Office of the President  to direct the ERC to address mounting complaints against PECO, listing down nine incidents of fire that hit PECO’s electricity poles from Oct. 19 to 21 alone based on the report of the Bureau of Fire Protection to city hall.

The ERC investigation into the safety standard violations of PECO coincided with another investigation by the Department of Energy into the twin power blackouts that hit the entire Panay Island and parts of Negros Island from Monday to Wednesday last week.

The DOE probe also included a complaint that PECO did not restore full supply to the entire city until Wednesday evening despite full restoration of supply from the national electricity grid last Nov. 30.

PECO’s franchise was not renewed by Congress when it expired on Jan. 19 because of a huge outpour of consumer complaints against PECO’s inadequate response to their problems, especially safety concerns from its aging distribution system.

Instead, Congress granted the distribution franchise to MORE Energy of port magnate Enrique Razon under Republic Act No.11212.

To ensure a smooth transition to MORE Energy’s takeover of the distribution system, PECO was allowed by the DOE and ERC to continue operating through its certificate of public convenience and necessity (CPCN) until the new power player completes its transition to full operations.

A CPCN requires a power utility to ensure public safety and efficient supply service to the public.

MORE Energy has secured the  go signal from the Iloilo Regional Trial Court (ETC) to expropriate PECO’s assets, but the 95-year old utility firm had asked the  Mandaluyong RTC to stop the expropriation.

The case was elevated by both parties to the Court of Appeals, then to the Supreme Court, which has yet to render its decision.