‘Poor distribution system discouraged investors’

One of Iloilo City’s prime business groups said one factor that turned investors away from the city in the past was the failure of the previous distribution utility to develop a world-class power distribution system that could have reduced electricity rates and lower operating costs.

The Iloilo Economic Development Foundation (ILEDF) noted that improvements by Panay Electric Co. (PECO) were “not enough to meet world-class standards that could have made its rates more competitive and acceptable to new businesses.”

“Though PECO initiated some improvements, still they were not enough, not at par with the standards and requirements set to attract investments,” ILEDF Executive Director Francis Gentoral said.

In a position paper based on a 2008 study by Singaporean consulting firm WPS on the improvements needed in the city’s power distribution system, ILEDF declared that Iloilo City needed a utility firm with “a demonstrated capability, track record, and financial capability to operate and maintain a distribution utility for a fast-growing metropolis; make significant investments in infrastructure; systems and technology; and human resources; and maintain a long-term commitment to Iloilo.”

Gentoral said these are “qualities that would provide Iloilo City with a world-class power distribution system that would assure investors of stable, continuous and cost-effective electricity supply.”

He said the entry of the new power utility, MORE Electric and Power Corp. (MORE Power) allowed Iloilo City to “get over the failures of PECO to fulfil its commitment to a world-class system.”

It also put the burden on MORE Power to ensure the modernization of the city’s power distribution system.

Gentoral urged the city’s residents to support MORE Power’s plans to invest P1.8 billion in new systems and equipment that could remove inefficiencies such as systems losses arising from pilferage and technical waste of electricity due to the ageing equipment and distribution lines.

In a technical study of the entire distribution network when MORE Power took over in March 2020, engineering expert firm MIESCOR Corp. projected that at least 30,000 illegal power connections in Iloilo City led to systems losses of as high as 9.3%, or way above standards set by the government.

The systems losses are paid for by residents and businesses through their monthly bills.

Gentoral said efforts by MORE Power to address the problems are most welcome.

The group also lauded MORE Power’s immediate lowering of power rates to below P9 per kilowatt hour, the first time that the city’s power rates fell below P10 per kwh after two decades.

He said the city’s business sector is hoping the Supreme Court would not hinder the city’s progress by rendering a decision that could impact on the future of a modern, world-class power distribution system for the city.

“ILEDF calls for unity in the face of the global health crisis and for PECO to accept the thing it can no longer change in order for the whole of Iloilo City to move forward and level up as envisioned by the city government,” Gentoral said.

He said ILEDF is confident that PECO will eventually accept its loss of the distribution system business for the benefit of Ionggos.