Testing the Waters of PPP in Power Distribution

President Ferdinand Marcos Jr.’s approval of the franchise for Negros Electric and Power Corporation (NEPC) to manage Central Negros’ electricity distribution system is a significant milestone in the power sector.

With Republic Act Number 12011 in effect, NEPC—a collaboration between Enrique Razon’s Primelectric Holdings Inc. and Central Negros Electric Cooperative (Ceneco)—is set to begin operations, promising uninterrupted power supply and enhanced customer service for over 220,000 accounts.

This move offers a fresh perspective on the efficacy of Public Private Partnerships (PPP) in the power distribution industry.

By integrating private sector efficiency with public sector oversight, NEPC aims to deliver reliable electricity while addressing historical issues within Ceneco.

The joint venture has committed an initial capital of two billion pesos for a five-year plan to modernize the electric infrastructure, aiming to reduce unscheduled power outages and improve system robustness.

NEPC’s journey will serve as a litmus test for the potential of PPPs in the public utility sector. With opposition from some quarters skeptical of private entities handling public utilities, the efficiency and stability of NEPC’s operations will be closely monitored.

The National Electrification Administration’s endorsement, alongside legislative support, underscores the high expectations placed on this initiative.

The success or failure of NEPC will not only impact Bacolod but will also resonate in Iloilo and other regions considering similar PPP models.

However, the transition from public to private management is not without its challenges and critics. Concerns about the privatization of public utilities often revolve around fears of increased costs, reduced transparency, and accountability.

This situation in Central Negros offers a unique case study to address these concerns and to measure the efficiency and stability of private companies in managing essential services.

For Iloilo province and other regions contemplating similar models, the success of NEPC in Central Negros could provide a blueprint. This initiative will test the private sector’s ability to deliver uninterrupted, high-quality service and manage the complex demands of power distribution.

To note, NEPC’s sister company, MORE Power, has done radical and revolutionary changes to Iloilo City’s distribution grid, which have become benchmarks for other areas.

The effectiveness of NEPC’s five-year rehabilitation plan, aimed at minimizing unscheduled power interruptions and modernizing infrastructure, will be crucial in this assessment.

Moreover, the involvement of local leaders, the National Electrification Administration (NEA), and the broader community will be pivotal.

NEPC’s promise to uphold commitments, such as retaining over 200 Ceneco employees and prioritizing loan repayments and employee benefits, will be under scrutiny.

The collaborative effort required for this transition highlights the importance of stakeholder engagement in PPPs.

The shift to NEPC managing Central Negros’ power distribution is a critical experiment in the power sector. It holds the potential to demonstrate the advantages of PPPs in infrastructure development and service efficiency.

Iloilo and other regions will undoubtedly monitor the outcomes closely, learning valuable lessons on the feasibility and impact of such partnerships in the public utility space.