ILOILO City – The Dec. 12 auction of Panay Electric Co.’s (PECO) assets by the city government to offset the power distribution utility’s real property tax (RPT) liabilities will no longer push through.
PECO paid the city government P134.9 million on Monday.
Yesterday, the Sangguniang Panlungsod (SP) authorized Mayor Jerry Treñas to sign an agreement with PECO relative to the latter’s tax obligations. The company will execute appropriate pleadings or motions to cause the termination of the tax cases it faces before the Local Board of Assessment Appeals (LBAA).
The P134.9 million paid represented PECO’s RPT liabilities from 2006 until 2019 (principal amount only).
The interests and penalties remain as subjects of LBAA Case No. 2017-01 and LBAA Case No. 2019-01.
PECO has always been willing to amicably settle its tax dispute with the city government, stressed PECO head of Public Engagement and Government Affairs Marcelo Cacho.
“We just wanted a clarification. Why were we suddenly slapped with an unfair 10-year back-tax assessment,” said Cacho.
He welcomed the scrapping of the auction of PECO assets on Dec. 12.
“Those who want to take over our services through whatever means at their disposal – ethical or otherwise – wanted to participate in the planned auction because they wanted to take shortcuts in acquiring power distribution assets,” said Cacho.
The truth is that they have no physical capability to serve the power needs of Iloilo City, he stressed.
“What do they really have right now other than the backing of their friends in government?” asked Cacho.
Last month, PECO rival MORE Electric and Power Corp. (MORE Power) expressed intention to join the auction.
The city government had planned to auction, among others, PECO’s 20,000 wooden and concrete posts, electric meters, transformers, electrical cables, and other power distribution equipment.
Also in the agreement between PECO and the city government were the following:
* the city government will issue an official receipt to PECO for the RPT payment made
* issue all appropriate licenses and permits to PECO for the operation of its business, subject to compliance with the Iloilo Tax Code
PECO had not been issued a business permit for failing to settle its real property taxes.
Its franchise actually expired on Jan. 19, 2019 and Congress refused to grant it another one, citing consumers’ complaints of, among others, poor customer relations, inaccurate or wrong billings and high rates. The government instead awarded a 25-year franchise to MORE Power.
What PECO only has is a provisional Certificate of Public Convenience and Necessity issued by the Energy Regulatory Commission to ensure uninterrupted service to consumers during a two-year transition period with MORE Power./PN