DOE hands tied on PECO-MORE issue

By: Emme Rose Santiagudo 

THE tug-of-war between two power distributors in Iloilo City is on a standstill as one of them is poised to lose its Certificate of Public Convenience and Necessity (CPCN) from the Energy Regulatory Commission (ERC).

By May 25, 2019, Panay Electric Co.’s (PECO) CPCN will expire, its congressional franchise expired four months ago on Jan 19.

PECO’s rival firm, MORE Electric and Power Co. (MORE Power), already secured its congressional franchise via Republic Act 11212 but it has yet to secure a CPCN from the ERC amid a protracted legal battle.

While the franchise could be viewed as a nominal privilege, the CPCN actually jumpstarts the operation of a power distribution firm.

Now, everyone is holding on to their seats while waiting for developments in this tug-of-war.

Department of Energy (DOE) Undersecretary Atty. Felix Fuentebella said that while they are monitoring the issue, the matter is still under ERC jurisdiction. 

Fuentebella was in Iloilo City on May 18, 2019 as the guest speaker of the 43rd Regional Alumni Institute of the University of the Philippines (UP) held at the UPV Auditorium.

Fuentebella said RA 11212 has a transitory provision that must be followed, a condition that actually ties DOE’s hands.

“Once this issue will heighten, there’s a transitory provision in the franchise law so we have to follow the law. Under the law kasi mayroon lang supervisory (power) si DOE so hindi siya nakikialam unless may nakita siyang violation na ginagawa ng player,” he said.

Based on the transitory provision, PECO may be authorized to operate for two more years until MORE Power has established its own power distribution system.

Fuentebella also emphasized that they cannot intervene since there are pending court cases but he stressed that the thrust of DOE is to safeguard the consumers and ensure that there will be no power interruptions.

“There’s a court case going on so we’re just waiting for all this because we cannot really intervene as far as this hearing is concerned. At the end of the day, the DOE is always on the consumer side kung ano yung nangyayari because we want a smooth transition and we want uninterrupted services on the delivery of power to the consumers,” he said.

Fuentebella said their last resort is government take-over, but this will only take place if, at its worst, the city suffers a power blackout. 

“Government takeover is always the last resort. Makikialam ang gobyerno under the Constitution in public utilities, but this is only subject to the condition na talagang wala na kayong kuryente,” he said.

 

 

NO INTERRUPTIONS UNLESS…

In an earlier interview, Engr. Randy Pastolero, PECO Vice President for Operations and General Manager, said they will heed the DOE until the franchise issue is resolved.

But Pastolero emphasized that PECO will continue operating even after the expiration of its CPCN, unless there is a specific instruction from the authority.

“Definitely, we will not stop our operation just because our CPCN already expired because we already agreed with the DOE and even our power suppliers that the delivery of power services to our consumers would be paramount. We will continue operating, unless there is a specific instruction from the authority,” he said.

 

COURT BATTLES

To recall, the battle between the two power firms never subsided even after MORE Power secured its franchise.

On March 11, 2019, MORE Power filed an expropriation case at the Iloilo Regional Trial Court in a bid to acquire PECO’s assets.

PECO struck back by seeking an injunction and temporary restraining order (TRO) against MORE Power, which was granted by the Mandaluyong City Regional Trial Court Branch 209 on March 13. 

The 20-day TRO enjoined the “respondents and/or any of their representatives from enforcing, implementing, and exercising any of the rights and obligations set forth under RA 11212.”

But MORE Power managed to secure on March 28 a TRO from the Court of Appeals preventing the Mandaluyong City RTC Branch 209 from enforcing its TRO against RA 1212.

The TRO granted by the CA’s Seventeenth Division is effective for 60 days from service to respondents. 

Meanwhile, MORE Power continues to prepare for a possible takeover of power distribution services in the city. 

On May 15, MORE Power signed an interim power supply agreement with KEPCO SPC Power Corporation (KSPC).

The agreement covers the 5-megawatt supply from KSPC, with the option for another 5MW. The interim power supply agreement is good for one year.

The power supply agreement will take effect once MORE Power starts its operations as the distribution utility of Iloilo City, if ever it takes over PECO.