Iloilo mayors favor joint venture in MORE Power’s expansion

By Rjay Zuriaga Castor

Mayors from the second and fourth districts of Iloilo are recommending a potential joint venture agreement (JVA) between MORE Electric and Power Corp. (MORE Power) and the Iloilo Electric Cooperatives (ILECOs).

Pavia Mayor Luigi Gorriceta told the Daily Guardian that he leans towards a JVA between the two firms, noting that it would prevent layoffs and minimize economic disruption to employees. He added that the local government “will try to bridge both electricity providers” but will leave the negotiations to them.

“We will work to convince both electricity providers to merge, similar to what happened with Central Negros Electric Cooperative, Inc. (CENECO), so that it will be a win-win situation,” he stressed.

Gorriceta also vowed to remain neutral in the matter and to develop a seamless system that respects consumers’ choice of distribution utility.

“The government will focus on the transition, assisting both electricity providers to ensure a harmonious transfer if some members prefer ILECO over MORE Power, and vice versa,” he added.

It is worth noting that the Sangguniang Bayan of Pavia unanimously approved a resolution urging MORE Power to swiftly expand its operations in Pavia and to consider a JVA with ILECO I.

The resolution cited the successful JVA of CENECO and Primelectric Holdings Inc./Negros Electric Power Corp. (NEPC).

Meanwhile, San Miguel Mayor Marina Luz Gorriceta also supported the idea, noting that a partnership would be beneficial to both parties.

“It would be beneficial if they form a partnership because if ILECO II closes, it could result in job losses and negatively impact residents. However, if they establish a JVA, there will be two existing players in the market,” she explained.

Passi City Mayor Atty. Stephen Palmares echoed the same sentiments, emphasizing that he welcomes MORE Power’s expansion in their area.

“We welcome the development. We will follow the law. If the law has given them a franchise, we will follow,” he added.

MORE Power plans to extend its services to 15 towns across both the second and fourth districts of Iloilo, including Alimodian, Leganes, Leon, New Lucena, Pavia, San Miguel, Santa Barbara, and Zarraga in the second district, and Anilao, Banate, Barotac Nuevo, Dingle, Dueñas, Dumangas, San Enrique, and Passi City in the fourth district.

The ILECOs filed a petition challenging the validity of Republic Act (RA) No. 11918, which effectively expanded MORE Power’s franchise into areas within ILECOs’ coverage.

In its recent ruling, the Supreme Court clarified that “electric cooperatives do not have a constitutional right to an exclusive franchise within their coverage areas.”

The Court noted that without competition, ILECOs could easily dictate electricity prices, and the entry of another player would benefit consumers.

OPEN DISCUSSION IS KEY

CENECO General Manager Atty. Arnel Lapore said that the two players should discuss the proposed expansion with an open mind.

“Debate openly in public, and even our local government officials can discuss this and have a straightforward discussion,” he said on Daily Guardian on Air live via Aksyon Radyo-Iloilo last Friday.

Lapore stated that an open discussion would generate better ideas and allow member-consumer-owners to offer suggestions.

“The most important thing is the service we provide to consumers, and this should be prioritized,” he stressed.

Lapore disclosed that CENECO had been dealing with substantial external and internal loan debts before he was installed as general manager in January 2023.

However, after the National Electrification Administration granted conditional consent to the JVA between CENECO and NEPC in November 2023, the cooperative has gradually recovered from its significant debts and system losses.

“We observed CENECO’s deficiencies, especially in capitalization, and NEPC will address these issues, particularly in upgrading its transmission lines,” he added.

The JVA between CENECO and NEPC follows a 70/30 scheme, where CENECO retains a 30 percent profit share from NEPC, while NEPC will provide 70 percent, or PHP 1.7 billion, as payment for CENECO’s distribution assets valued at PHP 2.4 billion.