More service for less cost

By Herbert Vego

“The customer is always right” is a familiar quotation in business establishments that prioritize customer satisfaction. It advocates lending an ear to customer complaints because they deserve good value for their money for being the lifeblood of the service providers.

The customers of the Iloilo Electric Cooperative (ILECO) in certain municipalities of Iloilo feel cheated because they pay much more for their electricity bills than what residents of Iloilo City pay to MORE Electric and Power Corp. (MORE Power).

They who live near the city want MORE Power to expand its services all over the second- and fourth-district municipalities.

Compare MORE Power’s reduced household rate of P6.38 to ILECO-1’s P10.90/kWh. The simplest explanation is that MORE Power passes on to paying customers the discounted rates imposed by the power producers.

ILECO could not compete because it is tied to higher-denominated generation contracts despite the reductions sought for by the Energy Regulatory Commission (ERC).

Both the electric cooperatives are distribution utilities or distributors that buy electricity produced by power generators like Panay Power Corporation, Palm Concepcion Power, Aboitiz Renewables, and the  Power Sector Assets and Liabilities Management Corporation (PSALM), among others.

The ongoing contracted generation source of MORE Power is PSALM’s geothermal plant in Tongonan, Leyte.

The distribution utilities transmit the generated power through the facilities of the National Grid Power Corporation (NGCP).

I would rather spare the readers of complications arising from the generation-transmission-distribution process. Suffice it to say that each distribution utility incurs different expenses, and so must bill customers based on feasibility.

After all, the House of Representatives’ committee on legislative franchises has already approved for plenary hearings House Bill No. 10271. As authored by Congressmen Mike Gorriceta (1^st Dist,) and Braeden John Biron (4th Dist), it seeks to amend RA 11212, the law granting MORE Power exclusive franchise to energize Iloilo City.  When amended, it would expand MORE Power’s franchise area to certain of the two congressional districts.

If I heard Engr. Mike Paguntalan Jr. (general manager of ILECO-1) right, the electric cooperatives in Iloilo (including ILECO 2 and 3) could not lower their rates to the MORE Power level because of the higher contracted prices they are obliged to pay their various sup by pliers.

ILECO 2 general manager Engr. Jose Redmond Roquios, on the other hand, believes that “public clamor” could not force the cooperatives to give way to MORE because they have their own exclusive franchises within a specified time frame and in areas authorized by the Electric Power Industry Reform Act (EPIRA) or R.A. 9136.

Somebody was telling us, however, that the Gorriceta-Biron bill might open Pandora’s box because of insinuations that before entering into a long-term contract with a favored power producer, certain members of the ILECO board had demanded and were granted underground perks.  As to who they are, it remains to be revealed.

Assuming that to be true, then MORE Power would then have stronger reasons to take over the areas served by ILECO I, namely Alimodian, San Miguel Leganes, Leon, Pavia, and Sta. Barbara; and ILECO 2, namely Barotac Nuevo, Dingle, Dueñas, Dumangas, New Lucena, Passi City, San Enrique, and Zarraga, and ILECO III serves Anilao and Banate.

Passing the bill into law would not be a walk in the park, though.  During the committee hearing, representatives from the National Electrification Administration (NEA) and the Philippine Rural Electric Cooperatives Association (PHILRECA) interposed objections, allegedly because these cooperatives have their own lawful franchises.

There is no argument against the reality, however, that any entity that fails to deliver its mandated services may be replaced through due process.

Is there a likelihood of MORE Power replacing ILECO as energizer of the aforementioned municipalities?

If we heard MORE President Roel Z. Castro right, his company does not intend to seize ILECO’s facilities but would instead set up its own in the areas covered by the amended franchise law.

Will the residents be made to either stay with ILECO or shift to MORE Power?

Only time will tell.