Ending the ILECO monopoly

By Herbert Vego

THE month of August augurs well for thousands of electricity consumers in Passi City and 15 towns of Iloilo province. Now they have a choice – either to remain connected with the Iloilo Electric Cooperative (ILECO) or shift to the Iloilo City-based MORE Electric and Power Corporation (MORE Power) in accordance with Republic Act No. 11918, passed in July 2022.

It could not be implemented that early, unfortunately, because of a petition jointly filed by ILECO 1, 2 and 3 for certiorari and prohibition, with a prayer for a temporary restraining order and writ of preliminary injunction, alleging that the law violated their rights to exclusive franchises, due process, non-impairment of contracts, and equal protection.

Their petition, fortunately for their own customers, failed in comparison to Congress’ motive in enacting RA 11918, which is to make electricity more affordable for the people of Iloilo province, and to promote healthy competition.

This corner lauds the Supreme Court for dismissing ILECO’s petition in a decision dated July 30, 2024, stressing that electric cooperatives “do not have a constitutional right to an exclusive franchise within their coverage areas.”

The high court cited Section 11, Article XII of the Constitution, which prohibits exclusive franchises:

“A franchise, as a privilege granted by the state, is not the exclusive private property of the franchisee. Thus, it must yield to serve the common good, as determined by Congress,” wrote Associate Justice Rodil V. Zalameda, who penned the decision.

“Without competition, ILECOs can easily dictate the price of electricity. Allowing the entry of another player thus benefits consumers, who no longer have to wait until ILECOs’ franchises expire in 2029, 2039, and 2053. This is in accordance with the Electric Power Industry Reform Act (EPIRA), which encourages competition in the electricity industry,”

The landmark decision could also end the monopoly of other electric cooperatives in the country.

On the other hand, it may also compel these cooperatives to perform well, if only to prevent their customers from leapfrogging to the other side.

To quote the late fashion magnate Gianni Versace, “It is nice to have valid competition; it pushes you to do better.”

I believe that MORE Power had no intention of competing with ILECO until the intervention by two congressmen – BJ Biron (4th district, Iloilo) and Michael Gorriceta (2nd district)– who filed resolutions seeking to amend MORE Power’s franchise (RA 11212) to expand to the province as a reaction to their constituents’ dissatisfaction with the three ILECOs.

Aside from Passi City, the expanded MORE coverage will include Alimodian, Leganes, Leon, New Lucena, Pavia, San Miguel, Santa Barbara, Zarraga, Anilao, Banate, Barotac Nuevo, Dingle, Duenas, Dumangas and San Enrique.

To reiterate,  the expanded MORE Power franchise does not dissolve the right of the co-op to do business as usual.

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MORE POWER TO CENTRAL NEGROS, TOO

ANOTHER electrifying news is the transformation of cash-strapped Central Negros Electric Cooperative (Ceneco) into Negros Electric and Power Corporation (NEPC), which is a joint venture with Primelectric, sister company of MORE Power.

The joint venture legally gained recognition through Republic Act Number 12011, which President Marcos signed into law on July 26, 2024.

Like MORE Power, the new company has Roel Castro as president and chief executive officer.NWe are prepared and ready to take over within this month of
August,” Castro told us. “That means all systems, personnel, and documentation are in place.”

NEPC faces the challenge of taking over a customer base of more than 200,000 customers, a number twice that of MORE Power.

Another challenge is to convert power pilferers into paying consumers, given that pilferage was one of the causes behind the bankruptcy of Ceneco.

“We have an amnesty program for them,” Castro said.

He recalled that when MORE Power took over Panay Electric Company, he had the same problem with pilferers who numbered about 30,000.  The same pilferers legalized, thus radically increasing the number of MORE Power’s legal connections from 62,000 in 2020 to almost 100,000 today.