MORE IN, PECO OUT: ERC gives nod to MORE, revokes PECO’s CPCN

By Emme Rose Santiagudo and Francis Allan L. Angelo

The Energy Regulatory Commission (ERC) has revoked the provisional Certificate of Public Convenience and Necessity (CPCN) of Panay Electric Company (PECO), a major blow to PECO as it lost yet another legal ground to continue its operation as the sole electricity provider of Iloilo City.

In a decision issued on March 5, 2020, ERC Chair and Chief Executive Officer (CEO) Agnes Devanadera found merit in the CPCN application of MORE Power.

ERC said its Technical Investigation also established the capacity of MORE Power to provide service to the city’s more than 60,000 consumers.

MORE Power submitted a Sheriff’s Return signed by Antonion A. Oscares Sheriff IV, informing that the writ of possession (WOP) has been served and fully implemented.

The Razon-led company commenced its operations on Feb. 28 after the implementation of the writ of possession based on an order of the Regional Trial Court Branch 23 granting the WOP.

An ocular inspection was conducted by the ERC through its technical personnel to verify the actual status of the distribution network in Iloilo City on March 3 to 4, 2020.

“The ERC Team submitted an Inspection Report confirming that MORE has gained full possession and control over the five substations, has prepared for all other aspects related to electricity distribution, and has power supply contracts in place with four power suppliers that will ensure uninterrupted supply of electricity, sufficient to serve the consumers in the franchise area,” ERC added.

The commission also issued a provisional authority to MORE Power to operate the distribution network and implement the last approved distribution charges of PECO.

ERC also required MORE Power to source and procure its power requirements.

“While MORE is unable to secure the Certificate of Exemption from the Department of Energy (DOE) necessary to enter into emergency power supply agreements, it shall source its power requirements from the current power generation suppliers of PECO,” the order furthered.

The meat of the decision reads:

“Mindful of its mandates to protect consumer interest, ensure uninterrupted electric service to consumers in Iloilo City and prevent chaos and confusion among said customers as to who is authorized to operate the distribution system in the area, the Commission, in its meeting on 05 March 2020, resolved to adopt the following resolutions:

1. 1. Revoke the provisional CPCN issued to PECO after determining that MORE has established or acquired its own distribution system and verified MORE’s complete transition to full operations;
   2. Issue a Provisional Authority, pursuant to Sec. 8 of Executive Order No. 172, authorizing MORE to operate the distribution network;
   3. Authorize MORE to implement the last approved distribution charges of PECO; and
   4. Require MORE to source and procure its power requirements in accordance with Section 5 of RA 11212.

While MORE is unable to secure the Certificate of Exemption from the Department of Energy (DOE) necessary to enter into emergency power supply agreements, it shall source its power requirements from the current power generation suppliers of PECO.”

With the cancellation of its CPCN, PECO’s claim that it is back at the helm of power distribution services is in precarious situation.

The latest order of Regional Trial Court Branch 23 Presiding Judge Emerald R. Contreras, who issued a writ of possession (WOP) last Feb 20, 2020 allowing MORE Power to start taking over distribution assets in Iloilo City, stressed the status quo or situation after the writ was implemented in MORE Power’s favor.

The order issued after the hearing on MORE Power’s expropriation case on March 6 directed MORE Power and PECO “to respect the Addendum to the Writ of Possession, pending the court’s verification of the status of MORE and PECO’s CPCN or until March 26, 2020.”

To recall, the addendum to the WOP stressed the following, among others:

-the sheriff to serve the writ in a peaceful manner;

-install MORE who may deploy their personnel to man and oversee the substations to exercise their possession and control of the distribution facilities, but the operation should still be handled by PECO personnel who has the technical expertise;

-maintain the status quo of the operation, so as to give time for MORE Power to orient/train/immerse their personnel before they fully take control of the operation;

-no PECO personnel in the rank and file, would be displaced during the transition period.

-proper identifications/determination of PECO assets/properties to be turned over to MORE Power

-submit the following proposals and records: -transition period, accounting, turnover of records like the list of consumers, documents relevant to the operation of the distribution systems, among others; inventory of personal properties under Category A or assets that were turned over to MORE Power, and inventory of real properties already under the possession of MORE.

Judge Contreras set another hearing on March 26 to give her time to study pending motions and the ERC order invalidating PECO’s CPCN.

The judge will invite an ERC representative to attend the hearing and shed light on the CPCN issue.

“Again, parties and counsels are reminded to refrain from releasing any public statements to avoid any further confusion,” the order added.

During the hearing, Judge Contreras said she was happy that the takeover of PECO assets by MORE last Feb 28, 2020 was peaceful and no power outage occurred.

In an interview, MORE Power legal counsel Hector Teodosio said that the court never issued an order to MORE to return the operation to PECO.

“The court simply said we will respect the addendum. Ang addendum naghambal nga ang operation itugyan sa PECO personnel, indi sa PECO management. There is a difference between PECO personnel and PECO management,” he stressed.

According to Teodosio, the WOP stressed that the disposition, control and possession of the properties is already with MORE Power.

“Ang nakabutang sa addendum nga gusto nya nga ang mga PECO personnel nga naga-operate sang substations man sa gihapon ang mag-operate upon takeover bangud worried sya nga basi indi familiar sa facilities sang PECO ang personnel sang MORE,” Tedosio said.

“Ginsunod ini sang MORE.  Pareho man gihapon nga mga personnel ang nagaduty sa substations halin sang Feb 28. Pero nagtransfer na ang ini nga mga personnel sang employment sa MORE kag ini man ang ginamandu sang MORE franchise law kag ni Judge (Contreras),” he added.