Newbie goes renewable

Residents of Iloilo City are indeed lucky, even blessed, to have a power distribution utility with the financial muscle and resolve to make a difference.

Only four years into its 25-year franchise to establish, operate, and maintain a distribution system to convey electric power to end-users in Iloilo City, MORE Electric and Power Corp. has spent P2 billion to upgrade and rehabilitate electric power infrastructure in the area which has suffered when it was still being serviced by the old electric distribution utility, Panay Electric Co. (PECO), whose franchise expired and was no longer renewed by Congress.

MORE Power is a subsidiary of Prime Strategic Holdings, which is wholly owned by businessman Enrique Razon Jr.

MORE Power took over PECO’s electric distribution assets by way of expropriation after payment of just compensation which was authorized under Republic Act 11212 signed on Feb. 14, 2019 by then president Rodrigo Duterte.

A bill expanding MORE Power’s franchise area to localities outside of Iloilo City covering the second and fourth districts of Iloilo also lapsed into law last year. The law authorized MORE Power to operate in the city of Passi, and in the municipalities of Alimodia, Leganes, Leon, New Lucena, Pavia, San Miguel, Santa Barbara, Zarraga, Anilao, Banate, Barotac Nuevo, Dingle, Duenas, Dumangas and San Enrique, all in Iloilo province.

Specifically, it can now serve 16 towns and the component city of Passi that were being served by Iloilo Electric Cooperatives I and II.

Despite being a newbie as a distribution utility (DU) in Iloilo City, but MORE Power already has technology that can match big players in the power industry.

Just recently, it entered into a tripartite agreement with the Energy Regulatory Commission (ERC) and Iloilo City LGU to promote the use of renewable energy (RE) in the city by moving to the net metering program and distributed energy resources (DER) to further reduce electricity costs and greenhouse gas emissions.

Currently, there are only two distribution utilities that ERC has partnered with for renewable energy adoption. The other one is Meralco. It is also ERC’s first collaboration for RE in the Visayas region.

Before a distribution utility can offer net metering and DER to its customers, infrastructure – such as the installation of smart meters and advanced communication systems – has to be in place. And MORE Power was able to quickly keep up with technology, with its investments already reaching P2 billion.

According to reports, despite the pandemic, their modernization blueprint was still carried out, mainly targeting facility upgrades, purchasing new equipment, implementing digital technology in their operations and laying out solutions and aggressive campaigns against electric pilferage and illegal connections.

It has been observed that MORE Power’s commitment and determination to provide quality power supply has resulted in an improved power situation in Iloilo City, an increase in business and investor confidence, and more importantly, a reduction in electricity cost. MORE Power has one of the lowest electricity rates in the country. From January to July this year, it implemented a reduction in power rates.

MORE Power president and CEO Roel Castro explained that from the very beginning of their operation, they have already promoted the use of green energy. In fact, the use of renewable energy is one of the major factors behind the reduction of electricity rates.

He emphasized that it is not a mere collaboration, but a demonstration of MORE Power’s commitment towards a sustainable and resilient energy future, adding that by embracing net metering and distributed energy resources, they can unlock the potential for cleaner, more cost-effective, and reliable energy supply.

Net metering is a system where residential and commercial customers can generate their own electricity from renewable sources such as solar panels. Any electricity generated that is not consumed by the customer is automatically exported to the distribution utility or DU’s system. The DU then gives a peso credit for the excess electricity received equivalent to the DU’s blended generation cost, excluding other generation adjustments, and deducts the credits earned to the customer’s electric bill.

MORE Power noted that when the number of people who use net metering increases, the use of renewable energy will also increase.

Under the tripartite agreement, MORE Power will establish a one-stop shop that offers renewable energy. The ERC will provide technical and regulatory expertise, including streamlining documentary submission, installation, payment and permitting processes of net-metering and DER. The Iloilo LGU, on the other hand, will ensure that green practices are implemented in the city through the use of solar panels.

As of June 30, a total of 72 qualified end-users in Iloilo City have been issued certificates of compliance under the net metering program by the ERC, with a collective capacity of 985.37 kilowatt-peak.

We can just hope and pray that all DUs, including electric cooperatives and private distribution utilities, will have the same vision and resolve to improve the delivery of services to their customers.

According to the Department of Energy, there are 152 DUs in the country. Of this, only 21, including Meralco and MORE Power, are privately owned investors utilities. The bulk would be customer-owned, membership-based non-profit electric cooperatives which are either registered with the National Electrification Administration or with the Cooperatives Development Authority while some are local government-run. Within the EC sector is a sub-group called the small power utility group utilities or SPUG ECs that provides electricity to areas that are not reached by the main grids of the NGCP.

A 2011 study on the efficiency analysis of ECs in the Philippines in the Philippine Management Review noted that being customer-owned and controlled by locally elected boards, ECs which are generally small have proven to be susceptible to local political volatility and poor management. It added that the lack of a substantial equity interest and of a profit incentive is likely the root cause for the financially compromised operations of many ECs.

The same study revealed that ECs in the country are operating with significant levels of technical inefficiency, with productivity of the sector as a whole stagnating during the post-EPIRA period.

But we cannot discount the role of ECs in making electricity available to households in rural areas. Under the Philippine Rural Electrification Program (REP) sitios electrification program ECs electrified 84 percent of the 148,385 sitios nationwide as of 2020.

There is however much room for improvement in terms of quality of service, electricity rates of most ECs. With access to financing still a problem, we don’t know how these financially challenged ECs can get out of the quagmire.

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