End of lifeline for PECO?

ARE the incorporators of Panay Electric Co. (PECO) of the opinion that, having paid more than one hundred million pesos in overdue retail taxes to the Iloilo city government, they would be given a new lifeline?

Just for a short time, probably, since Mayor Jerry Treñas could no longer sell PECO’s power lines and poles at public auction.

But as what he firmly made known, the city mayor is “exasperated” with the seemingly endless delay in the implementation of the law, Republic Act (RA) 11212, turning over the power distribution from PECO to MORE Electric and Power Corp. (MORE Power).

It’s a change of heart for the mayor. Many months ago when I phoned him for reaction to the refusal of PECO to give way to MORE Power, he responded, “We have to wait for the courts to rule.”

But now, to quote a front-page story in Panay News (Dec. 10, 2019 issue), “The mayor warned of dire consequences if the uncertainty on the power distribution here lingers indefinitely.”

As confirmed by the Energy Regulatory Commission (ERC) and city fire marshal, Chief Inspector Christopher Regencia, PECO committed lapses in the operations and maintenance of its distribution system – what with its rotting poles and “spaghetti” wires – thus posing danger to lives and properties.

Who wouldn’t be impatient? Since everybody in Iloilo City, like the mayor, wants to “level up,” how could that be done by a 96-year-old distribution utility that had not upgraded itself to “world-class” category?  After all, it would now be foolhardy for PECO to spend billions of pesos to modernize.

The entering MORE Power, on the other hand, has set aside P1.7 billion for its first five years of rehabilitating the existing distribution system.

To reiterate what everybody knows already, while its franchise expired on Jan. 19, 2019, PECO opted to “extend” by questioning the “constitutionality” of RA 11212’s expropriation clause before the Regional Trial Court (RTC) in Mandaluyong City, leaving the ERC no choice but to issue it a certificate of public convenience and necessity (CPCN) in the interim.

But that’s now water under the bridge. The recent act of the Supreme Court – issuing a temporary restraining order against the lower court’s ruling calling RA 11212’s “unconstitutional” – could now compel Judge Daniel Amular of RTC-Iloilo, Branch 35, to serve the ministerial writ of possession that would compel PECO to turn over power distribution to MORE in exchange for the offered “just compensation” in the amount of P481,842,450.

Some sympathizers of PECO think it’s too small.

But a resigned PECO employee – Jose Allen Aquino, past president of PECO Employees and Workers Association (PECEWA) – told us, such compensation would have been unnecessary because the cost of all of PECO, including its office building, had been paid for by power users, embedded piecemeal in the power users’ monthly bills under the principle of full recovery provided by RA 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA).

“While building its new office building,” Aquino said, “PECO quoted P70 million as the recoverable cost. We opposed it before ERC, which lowered the amount.”

Like roads and bridges, the power distribution utility is vested with public interest, hence a public property. On that point hinges the expropriation provision (Section 10) of RA 11212: “The grantee may acquire such private property as is actually necessary for the realization of the purposes for which this franchise is granted, including but not limited to poles, wires, cables, transformers.”

Yes, it’s the only win-win solution. ([email protected]/PN)


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