At a just price

The past few months must be confusing times for the people of Iloilo as two power utility companies battle it out in courts over the expropriation of electricity distribution system in this Western Visayas province. Iloilo is the capital of the province and is among the country’s major urban centers. It prides itself as the so-called “heart” of the Philippines because of its strategic location.

Being one of the more progressive provinces in the country, the electricity distribution service in the province has drawn an ongoing fierce contest between two power utilities trying to edge each other out. Franchised for the past 95 years, Panay Electric Co. or PECO suddenly found itself franchise-less after the 17th Congress did not renew it and awarded the franchise to More Electric and Power Corp., or MORE for short.

PECO which held the distribution utility (DU) had been fighting off court orders against MORE as the new DU franchise owner in the exercise of its expropriation power and take over PECO’s aged electricity distribution network in Iloilo City.

It has reached already the Supreme Court which earlier denied the petition of MORE for a temporary restraining order (TRO) on a lower court resolution that upheld the permanent discontinuation of the expropriation case. 

At the rate the two protagonists fight tooth and nail their court battles, it looks like it would be a protracted one at the detriment of the people of Iloilo.

Business tycoon Enrique Razon Jr. owns MORE. Razon is engaged in a lot of big business from his global flagship company – the International Container Terminal Services Inc. – and also as a business partner in the casino operations in Solaire. PECO, on the other hand, is 70 percent owned by Iloilo’s known old rich clan, the Cacho family.

But what has drawn an industrialist like Razon to what seems to be out of his usual business interests like operating a distribution utility (DU) in his home province?   

Perhaps, Razon sees MORE as an important component of what he believes is an important economic hub in southern Philippines with his planned P10-billion development plan for two ports in Iloilo under contract from the government. The Iloilo City and Dumangas ports could be strategic cargo hubs to Razon’s port services with the growing volume of Southeast Asian trade.

In a decision that boosts Razon’s Iloilo trade hub development plan, the 18th Division of the Court of Appeals (CA) based in Cebu struck down two petitions by PECO to stop MORE’s expropriation of its distribution assets. Foremost of the grounds cited by the Appellate Court is the fact that this case could only be heard by the High Court.

In a decision penned by associate justice Alfredo Ampuan, the CA spared no word in stressing that while it has no jurisdiction, PECO failed to show damage to its business. Since PECO no longer owns the DU franchise, the CA ruling noted, because it has been awarded to MORE by the 17th Congress.

No less than President Rodrigo Duterte upheld the congressional approval of the 25-year franchise to MORE when he signed Republic Act (RA) 11212 last Feb. 14. The franchise, among other things, authorized MORE to take over all and any facility and property it needs to ensure Iloilo City and nearby municipalities have continuous and assured supply of electricity. 

In his 17-page decision handed down last Oct. 3, Justice Ampuan also scored PECO for claiming that MORE’s takeover would plunge Iloilo into blackouts. This is precisely what the MORE take over is trying to prevent by expropriating PECO’s distribution facilities.

The CA dismissed PECO’s claim of damage to the utility. The ruling pointed out that PECO only continued to operate under a temporary permit until MORE completes the transition. After which, MORE would be fully functioning as Iloilo City’s electric utility for the duration of the 25-year franchise given by the 17th Congress and Malacañang to Razon’s company, the CA added.

This makes sense as the Senate and the House of Representatives ignored PECO when it sought the renewal of its DU franchise that expired in Jan. 19 this year. It was the consequence of poor but expensive electricity complaints of Ilonggo people brought before the Iloilo City Council. The City Council endorsed and even joined the petition for the two chambers of Congress to grant the franchise to another company because they have had enough of PECO’s deteriorating services that have not been addressed through their decades of operations.

Ageing facilities caused frequent brownouts and an untrained billing department ignored customer complaints of overbilling of as much as 1,000 percent and bad customer relations. The complaints against PECO exploded out into the open when Sen. Grace Poe, an Ilongga herself, faced angry Ilonggos when the Senate public services committee she chaired conducted a public hearing in Iloilo City in early part of last year.

Irate PECO customers submitted electricity bills to Poe that showed PECO suddenly raised their monthly bills by as much as 1,000 percent. Instead of acting on PECO’s application for the renewal of its congressional franchise, the House of Representatives and the Senate approved instead a franchise for Razon’s MORE.

RA 11212 which put into law MORE’s legislative franchise gave PECO a temporary permit to continue its operations until MORE has completed the two-year transition, granting it the power of eminent domain. Thus, this would pave the way for the Razon DU to take over any asset, including electric poles and other distribution assets by PECO. 

How else can MORE perform the DU services to some 50,000 Ilonggo homes and businesses under its franchise assigned to it by Congress and Malacañang if PECO refuses to honor these legal and lawful orders?

It might be more prudent for PECO to just negotiate with MORE a good selling price for its assets. The signs are clear. The people of Iloilo deserve better services from an electric utility that can install more reliable electric services at a just price.