ILECO 1 may not survive competition

By Herbert Vego

IT is my personal opinion that Iloilo 1 Electric Cooperative (ILECO 1) could not cope with competition if and when the bill of First District Rep. Janette Garin (House Bill 6292) passes into law.

The bill would grant MORE Power and Electric Corp. (MORE Power) the legislative franchise to compete with ILECO 1 in all the seven towns of her district — Guimbal, Igbaras, Tubungan, Oton, Tigbauan, Miag-ao and San Joaquin.

Garin’s reason is to provide residents with better service, citing a Supreme Court ruling that allows competition in the utility sector; and to bring MORE Power’s fast, reliable, responsive, modern, and forward-looking services to more areas, as requested by local officials.

In a resolution, the Sangguniang Bayan of Miag-ao had written a resolution, partly stating, “The driving premise behind this initiative is the collective aspiration of the constituents to enjoy the same improved quality of electrical service currently available in areas already served by MORE Power.”

Garin would only withdraw her bill if ILECO 1 could slash its residential rate by at least two pesos per kilowatt-hour.  It’s a condition that the ILECO 1 management has rejected for being unviable.

Besides, electric utilities cannot arbitrarily change a rate.  It has to pass a careful and thorough scrutiny by the Energy Regulatory Commission (ERC)

That leaves Garin with no choice but to push for the passage of her bill which would pit the cooperative against a well-funded private corporation.

A retired general manager of ILECO, Wilfred Billena, commented in a Facebook post, “For ILECO 1 to have a competition is truly an exciting scenario. It will be the dawn of a new era of excellent service, heightened efficiency and cost-effective rates.”

In such a competition, however, I personally believe that ILECO 1 would eventually lose at least 50 percent of its power consumers to the new player which has already entrenched itself as the distribution utility in Iloilo City.

There are 80,000 ILECO 1 customers in the First District.

MORE Power, on the other hand, enjoys the patronage of 110,000 households in Iloilo City, which could double anytime soon because of its newly-expanded franchise to Passi and 15 towns of the Second and Fourth Districts of Iloilo.

Anyway, we can only presume that the congresswoman is discontented with ILECO 1 even if most of its top-level personnel are either friends or relatives. Otherwise, why would she encourage competition?

Anyway, even if all households in the Garin country stay loyal to the cooperative, competition has already begun outside of her turf.

It’s because, aside from the seven towns of the First District, ILECO 1 also energizes eight  towns of the Second District, which may now be energized by MORE Power as granted by a legislative franchise (Republic Act 11918).   They are the municipalities of Alimodian, Cabatuan, Leganes, San Miguel, Sta. Barbara, Leon, Maasin and Pavia.

Power lines are now emerging in Pavia, the commercial hub of the Second District. In fact, only last Sunday (Jan. 18), the International Builders Corporation (IBC) marked its shift to MORE Power with a switch-on ceremony attended by MORE Power President Roel Castro, IBC managers and Pavia’s municipal officials.

Consider it a precursor to more shifts to come.

Since the volume of such shifts remains to be seen, ILECO 1 still lays claim to patronage of 170,000 customers from both the First and Second Districts.  But what if half of them go the other way?

If I may suggest a win-win solution, why not a joint venture with MORE Power?

The ILECO 1 management is no doubt familiar with the joint venture agreement inked between the debt-ridden Central Negros Electric Cooperative (CENECO) and Primelectric Holdings in Bacolod City, resulting in the emergence of Negros Electric and Power Corporation (NEPC) in 2024.

The resulting partnership saved CENECO – which was wallowing in PHP 800 million debts — from bankruptcy.