No way for ILECO 1 to cut rates

By Herbert Vego

DID I hear right that Iloilo 1st District Rep. Janette Garin would no longer push for the expansion of the franchise of MORE Electric and Power Corporation (MORE Power) to her turf if Iloilo 1 Electric Cooperative Inc. (ILECO 1) brings down its electricity rates?

Good idea, yes, but her constituents fear it might bankrupt the cooperative which employs a good number of her friends and relatives.

Briefly, her House Bill No. 6292 is aimed at amending provisions of Republic Act 11212, as amended by RA 11918, which has already expanded the franchise of Iloilo City’s distribution utility to Passi City and 15 towns in Iloilo’s 2nd and 4th districts.

Garin’s bill, I guess,  was her response to a February 7, 2025 resolution of a consumers’ group, Bantay ng Bayan–101 (BNB 101), urging 1st District officials to push for MORE Power’s entry.

The Sangguniang Bayan of Miag-ao responded with its own 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.”

Anyway, if it were possible for ILECO 1 to heed her request to slash down its rates by at least two pesos per kilowatt-hour (kWh), why not?

Its chairman of the board, Grace Laarni Custodio, is a relative of the congresswoman by affinity.

But as argued by board secretary Atty. Salvador P. Cabaluna III on the radio program Tribuna sang Banwa on Aksyon Radyo, it could not be done without losing because the cooperative, being non-profit, earns only PHP 1.61 per kWh.

Not even MORE Power could slash its own rates by so much. Its present residential rate of PHP 11.85 is around one peso lower than those of ILECOs 1, 2 and 3.

Power rates go up or come down depending on fluctuation of fuel and generation charges imposed by power plants.

Surprisingly, we have yet to hear comments from top-level officials of ILECO 1. Do they have no choice but yield?

That seems to be the sentiment of Engr. June Garanchon, ILECO 1 technical services department head, who told this writer that since the Supreme Court had already ruled that electric cooperatives do not have a constitutional right to an exclusive franchise within their coverage areas, they would have to face the possibility of competition with MORE Power.

My good friend Leopoldo “Doods” Moragas – a native of Miag-ao and retired senior assistant vice-president of the Philippine National Bank (PNB) – reacted this way on Facebook:

“ILECO and MORE to co-exist and compete with each other? Hahaha. Perhaps my friend ex-GM can further expound his opinion? What competition?”

Moragas was obviously referring to former ILECO 1 General Manager Wilfred Billena, who is in a better position to see whether competition would keep it alive. Here’s what Billena wrote on the matter:

“No matter what argument Ileco 1 makes, it’s a fact that their services have deteriorated over the years. Their system average interruption frequency Index and other similar indexes had considerably gone up to the annoyance of consumers. And that situation is not an indication of preparedness for competition.”

Josh Talaman, a native of Tubungan (one of the seven municipalities of the 1st Dist.) responded to Billena on Facebook, “I am curious, Sir, are you in favor of competition or JVA? Will it really lower the rate and improve service?”

JVA refers to “joint venture agreement,” which could be an alternative beneficial to both MORE Power and ILECO 1.

Remember, it was a JVA with Primelectric (the holding company of MORE Power) that saved Central Negros Electric Coop. (CENECO) from bankruptcy, having incurred more than PHP 800 million in various debts.

Lo and behold, from out of that JVA has emerged Negros Electric and Power Corp. (NEPC).