MORE Power bill an ‘opportunity’ for ILECOs to improve services

By Joseph B.A. Marzan

The author of the bill that seeks to expand More Electric and Power Corporation (MORE Power) says that the House Committee on Legislative Franchises’ approval on Tuesday should be a sign for the Iloilo Electric Cooperative (ILECO) to improve its services to its customers.

The Committee approved House Bill No. 10271 on Tuesday, which would expand MORE Power’s existing franchise coverage (Republic Act No. 11212) beyond Iloilo City, to the 2nd and 4th congressional districts of Iloilo province.

These include the towns of Alimodian, Anilao, Banate, Barotac Nuevo, Dingle, Dueñas, Dumangas, Leganes, Leon, New Lucena, Pavia, San Enrique, San Miguel, and Zarraga, as well as Passi City.

These towns and city are already under the coverage areas of ILECO I, II, and III.

Following the committee’s approval, the Philippine Rural Electric Cooperatives Association (PHILRECA) publicized a letter to committee chairperson Rep. Franz Alvarez (Palawan-1st) opposing the bill, saying that it will not benefit the public.

The PHILRECA’s opposition is based on the following grounds:

Giving MORE Power legislative franchise to operate in ILECO areas would violate Rep. Act Nos. 6038 (National Electrification Administration Act) and 9136 (Electric Power Industry Reform Act or EPIRA of 2001);

The premise of MORE Power’s reduced electric rates in Iloilo were the lowest in the country were “without context and actually flawed”;

MORE Power cannot offer cheaper and more affordable electricity and energy cost, and instead, will only charge consumers with a higher rate; and

The difference between MORE Power’s and ILECO’s rates are primarily due to generation cost, not distribution cost.

One of the bill’s co-authors, Rep. Michael Gorriceta (Iloilo-2nd), told Daily Guardian on Wednesday that he and co-author Braeden John Biron (Iloilo-4th), “understood” and “expected” resistance from ILECO I and II.

Both Biron and Gorriceta had said that they are not siding with MORE Power over electric cooperatives as they only want what’s best for the consumers. They said the bill will also give a chance to all concerned parties to present their sides.

Gorriceta reiterated his statement in previous interviews, that the filing of the bill was a response to public clamor “for better electric utility service” in their districts.

The local legislative bodies of Leganes, Pavia, Zarraga, and Passi City have previously passed resolutions urging their district representatives in Congress to pass a law to allow MORE Power’s entry into their areas, citing Iloilo City’s low rates and swift response to power interruptions.

“In my sponsorship speech, I emphasized the role of the electric cooperatives in the electrification program of the government since the beginning of time, even when there was no rural electrification. We have not forgotten, and we recognized that. But because there is public clamor, and because our towns have been reaching out to me and [Biron], so we had no choice but to elevate the matter through the proper process which is in Congress,” Gorriceta said in a phone interview.

He said that if Congress does not pass the bill, it would be ILECO’s “chance” to improve their services and lower their rates.

He added that the bill may even pressure MORE Power to lower their rates if it would be approved and allow Iloilo City’s power provider to expand.

Either way, he believes that the bill would bring about “a victory for electricity consumers”.

“If ever ILECO would remain and [the MORE Power bill] would not be approved, ILECO will be given a chance to improve their services and look for ways to lower the electricity rates they charge, to give the consumers the service they need and want. Also, on MORE’s part, they are pressured to maintain a lower cost of electricity because people are expecting them to continue these rates and at the same time, maintain the services they are known for,” he added.

As to PHILRECA’s opposition to the bill, Gorriceta repeated that two of the partylists representing the electricity sector understood the authors’ position during the hearing.

Reps. Sergio Dagooc (Association of Philippine Electric Cooperatives) and Godofredo Guya (Rural Electric Consumers and Beneficiaries of Development Advancement) were present during the hearing where they also stated their opposition to the bill.

As to the alleged possible violations of the laws, he declined to comment, saying only to “leave it to the expert agencies”, pertaining to the Department of Energy (DOE), the Energy Regulatory Commission (ERC), and the National Electrification Administration (NEA).

OPPOSITION FROM ILECO II

ILECO II general manager Engr. Jose Redmond Roquios, confirmed that they expressed their opposition to HB 10271 during Tuesday’s hearing.

Like PHILRECA, Roquios cited provisions of R.A. 9136 which states that there should be one exclusive power provider in an area.

ILECO I, referred to by Section 4(q) of R.A. 9136 or the EPIRA as a “distribution utility”, having an exclusive franchise to operate a distribution system in a certain area is defined by their charter.

“[The bill] will contradict our existing franchise, which lets us provide services to our franchise areas,” Roquios said.

In response to the “public clamor” cited as reason for pushing the bill, Roquios said the attractiveness of MORE Power’s reduced rates is “temporary” since it is a new distribution utility.

MORE Power took over as Iloilo City’s power provider in February 2020, more than a year after its congressional franchise R.A. 11212 was signed into law.

He also pointed to MORE Power’s agreement with state-run Power Sector Assets and Liabilities Management Corporation, which provides 100 percent of Iloilo City’s power needs.

ILECO I, II, and III, have a different source which is the Wholesale Electricity Spot Market (WESM), a private energy market run by the Philippine Electricity Market Corporation.

“It’s good for them that they were given that kind of capacity, but that will disappear, the decreased rates. Our rates only rose in the previous months because of the [Wholesale Electricity Spot Market] and congestion prices. Our normal rate ranges between P8-P9, which is the true rate. It’s not fair to compare a subsidized rate [MORE Power] to a true rate,” Roquios said.

Roquios also suggested that a further study on the power rates between MORE Power and ILECO should have been done before the bill was approved by the committee.

He welcomed DOE’s suggestion during the hearing to create a panel that would study the existing situation in power rates and services and the possible effects of the bill to ILECO.

“It would be better if there was an independent study on the power rates, to evaluate the real situation, if [MORE Power’s rates] are genuine and sustainable or not. If that’s only temporary, that would be only until July. We should’ve also looked at the bilateral contracts which would ensure that the rate would exist for 5 to 10 years,” he said.

As to Gorriceta’s suggestion that the bill will push ILECO to improve its rates and services, he said that their service was much better than that of MORE Power, pointing to the more frequent power outages in Iloilo City.

“Our services are much better than [MORE Power’s]. We see the comments that they have more [power interruptions]. For us, it happens only because they are exposed overhead by elements, although we keep doing preventive maintenance on that. On this matter, I don’t want to compare, but on the side of ILECO II, our basic services and responses to outages are much better,” he said.

Improving their services and keeping their rates low is on top of their minds even before the current pandemic, according to Roquios.

“We have been exerting effort to keep our prices down. In the long term, we are pushing to bid so we have cheaper power, and for our services, we would review. We’ve been meeting a lot to improve services as well,” Roquios said.

Daily Guardian also reached out to ILECO I General Manager Engr. Miguel Paguntalan, but he has yet to respond as of this writing.