For MORE Power-ILECO 1 joint venture

By Herbert Vego

A consumer organization known as Bantay ng Bayan-101 (BNB-101) used to express conformity with the franchise bill of Rep. Janette Garin (House Bill 7647), which would allow MORE Electric and Power Corp. (MORE Power) to compete with the Iloilo 1 Electric Cooperative (ILECO 1) as the second distribution utility (DU) in her constituency, the 1st District of Iloilo. Competition would empower her people to exercise their freedom of choice.

Reacting to some elements criticizing her bill, Garin expressed willingness to withdraw it if ILECO 1 could slash its residential rate by at least PHP 2 per kilowatt-hour.

Atty. Salvador Cabaluna III, secretary of the ILECO 1 board of directors, begged to disagree because they could not comply with her request without losing money.

Anyway, the bill has already been approved by the House of Representatives and is awaiting similar action by the Senate.

This time, however, rather than wait for the bill to turn into law, BNB would prefer both DUs to ink a joint venture agreement.

In a brief conversation with this writer, BNB President Raul Cordova expressed the opinion that while the Supreme Court (SC) had upheld the legality of MORE Power’s franchise expansion beyond Iloilo City, the better way is to forge a joint venture.

The SC decision refers to Republic Act 11918, allowing MORE Power to distribute electricity to Alimodian, Leganes, Leon, New Lucena, Pavia, San Miguel, Santa Barbara, Zarraga, Anilao, Banate, Barotac Nuevo, Dingle, Dueñas, Dumangas, San Enrique, and Passi City.

An existing joint venture between MORE Power and the Central Negros Electric Cooperative (CENECO) in Bacolod City since 2024 has stabilized the operation of the latter, which used to wallow in hundreds of millions of pesos in debt. The merger is now known as Negros Electric and Power Corp. (a.k.a. NEPC or Negros Power).

As an immediate result of that partnership, Negros Power has grown by leaps and bounds, from 177,737 customers in August 2024 to around 300,000 today.

“It would be good for us, too,” Cordova said. “It would spare us the long wait for MORE Power to construct its power lines in the district.”

The 1st District of Iloilo consists of the seven towns of Guimbal, Igbaras, Tubungan, Oton, Tigbauan, Miag-ao, and San Joaquin.

This writer, too, believes in a joint merger as the face-saving alternative to competition that would diminish the patronage of the old distribution utility. But what if no such merger emerges?

Assuming that ILECO 1 enjoys the patronage of 200,000 customers and half of them shift to the new player, will it survive the competition?

A number of ILECO 1 employees I have talked to believe that since the Supreme Court has spoken, they are no longer in a position to oppose the competition but would just have to work harder to retain their customers.

In a comment posted by retired ILECO 1 general manager Wilfred Billena, he said that while power consumers may welcome competition, “No matter what argument ILECO 1 makes, it’s a fact that their services have deteriorated over the years. Their system average interruption frequency index and other similar indexes have considerably gone up to the annoyance of consumers. That situation is not an indication of preparedness for competition.”

A native of Miag-ao, Iloilo, and retired senior assistant vice president of the Philippine National Bank (PNB), Leopoldo “Doods” Moragas, predicted that “ILECO I shall be left with no option but to enter into a joint venture agreement with MORE Power.”

He insinuated that such a partnership could shape up in the event the Garin bill morphs into law.

Retired Provincial Prosecutor Rolando Escala Nielo agreed, “A joint venture will be a win-win solution.”

I can only guess that MORE Power President and CEO Roel Z. Castro will agree.