Erc extends peco’s life but interim cpcn valid until more power takes over

By: Emme Rose Santiagudo

PANAY Electric Co. (PECO) got an extended lease on life after the Energy Regulatory Commission (ERC) allowed it to operate for now amid the transition to the new franchise holder, MORE Electric and Power Corp. (MORE Power).

ERC extended PECO’s life by issuing on May 24, 2019 a provisional certificate of public convenience and necessity (CPCN) to the embattled firm.

PECO’s CPCN, which allows a distribution to operate, is supposed to expire today, May 25. Its congressional franchise also expired in January 2019 while its rival firm, MORE Power, acquired its franchise on Feb 14, 2019 with the signing of Republic Act No. 11212. 

MORE Power is also awaiting the issuance of its CPCN from ERC even as it initiated expropriation proceedings against PECO’s assets before the Iloilo Regional Trial Court (RTC).

In its order dated May 21, 2019, the ERC en banc granted the provisional CPCN to PECO to protect the consumers and ensure continuous and stable power supply. 

Under the law, we (the ERC) are authorized to grant PECO the necessary provisional CPCN during the interim period or until MORE, the legislative franchisee, has established and can fully operate its own distribution system,” said ERC Chairperson and CEO Agnes VST Devanadera in an official statement.

The ERC cited Section 17 of RA 11212, which grants provisional authority to PECO to operate the distribution system until MORE Power establishes its own system and completes the transition period that will not exceed two years.

Devanadera clarified that the provisional CPCN to PECO during the transition period shall not be construed as extending its franchise, which already expired on January 18.

Apparently, PECO’s lifeline is MORE Power’s congressional franchise.

“I would like to underscore the provision of the law that the provisional CPCN granted to PECO during the transition period shall not be construed as extending the franchise of PECO. MORE, on the other hand, can exercise its right of eminent domain whereby it may acquire such private property that is actually necessary to enable it to perform its obligation to provide uninterrupted supply of electricity in Iloilo City,” Devanadera said.

Based on the ERC order, the provisional CPCN granted to PECO is subject to the following conditions:

• the issuance of an Order granting a Provisional CPCN in favor of PECO covers only the “Interim Period” in order to ensure uninterrupted supply of electricity in Iloilo City;
• PECO shall settle the full amount of refund pursuant to the Commission’s Order dated 16 November 2009, in ERC Case No. 2001-333 (96-26), not later than 30 June 2019;
• PECO shall submit a report within five (5) days from 30 June 2019; and
• the Provisional CPCN in favor of PECO shall be automatically revoked and shall cease to have any force and effect, subject to the provision of Section 10 of R.A. No. 11212.

Meanwhile, MORE Power CEO and President Roel Z. Castro welcomed the provisional authority to PECO.

Castro said the ERC’s move is proper, especially in ensuring the welfare of the consumers.

“That’s proper naman because if hindi nila binigyan ng provisional authority, wala silang license to operate then who will provide the electricity to consumers. The beneficiaries are customers. At the end of the day we’re always looking at the welfare of the consumers,” he said.

According to Castro, the provisional CPCN is valid while PECO still has the distribution assets.

To recall, MORE Power filed an expropriation case on March 11, 2019 before the Iloilo Regional Trial Court Branch 37 to acquire PECO assets.

The hearing on the writ of possession on May 23 was postponed as RTC Judge Yvette Go decides on PECO’s motion to suspend the entire expropriation proceedings.

The ways he sees it, Castro said once the court grants their expropriation case and PECO is stripped of their assets, MORE Power can officially takeover and their CPCN will also be granted.

“The way I see it assuming na hindi pa tapos yung expropriation and the CPCN was given to MORE which means that the assets are still in their custody or stewardship and the license to operate is sa atin, so mas magulo yun. Hindi pa mabigay yung CPCN because wala pa yung assets,” he said.

Meanwhile, PECO has said in earlier interviews that they will again seek the renewal of their franchise with the new Congress.