REALITY CHECK: Ground realities not favorable to rival – PECO

ILOILO City – The realities on the ground are on its side, according to Panay Electric Company (PECO), the sole power distributor in this city for nearly a century. On the other hand, a newcomer seeking a franchise to distribute power needs considerable time, perhaps more than a year, to set up its own facilities, said PECO vice president for operations Engr. Randy Pastolero.

PECO’s franchise rival, More Electric and Power Corporation (More Power), still has no distribution network, power rates and supply contracts, among others.

PECO has applied for a 25-year extension of its franchise that is expiring next year.

“While More Power may have the technical capability and financial capability, its does not have the facilities,” said Pastolero.

During a hearing of the Lower House’s committee on legislative franchises for More Power’s franchise application, the company admitted it needed at least a year to set up its facilities.

Pastolero reiterated that PECO won’t sell its assets to More Power.

“If More Power needs at least a year to set up its facilities assuming it manages to secure a franchise and PECO fails to secure a franchise extension, what will happen to Iloilo City,” asked Pastolero.

The PECO official also wondered where More Power would put its facilities such as electric posts.

The Philippine Electrical Code has guidelines as to the clearances and even the Department of Public Works and Highways has one too – only one meter clearance from the road.

“PECO’s existing facilities are on these one-meter clearance areas. Where will More Power set up its own? Has it even started preparing to seek regulatory approval for this,” said Pastolero.

In a recent press conference, More Power president Roel Castro assured Ilonggos his company would be efficient in distributing electricity even if it is a new industry player.

“Running an electric utility is not so much a specialized job or skill as we may think. What I am trying to emphasize is maraming talents out there. It is not as if it’s too specialized that you really have to go out and look for them,” he said.

Another ticklish issue is the power rates of More Power, Pastolero said.

“What are its rates? For this, it needs the approval of the Energy Regulatory Commission.  A thorough study for this is needed and this takes time, even years,” he said.

The PECO official also wondered if More Power already has power supply contracts.

Prior to the approval of a power supply contract, there is a need to post and subject it to a competitive selection process, said Pastolero.

“This takes time also. After that, you will have the actual contract and you have to submit this to ERC for approval. So napreparahan na ini? Can we count on More Power’s assurance that it can do all these in one year,” asked Pastolero.

He also stressed the importance of having a grid impact study and this one concerns the National Grid Power Corporation (NGCP).

“If it’s a new system wanting to get connected to the grid, an impact study is need. NGCP won’t easily let anyone into its system without a proper study, and one year to accomplish this is highly doubtful,” said Pastolero.

Setting up power substations also takes time, he added. There must be regulatory approval, actual importation and actual testing and commissioning and finally, energizing of units.

“Is it not easier for Congress to just renew the franchise of PECO rather than give the franchise to an entity that does not even have a single pole,” asked Pastolero.

Even if congressional approval of its franchise application is still uncertain, Castro said More Power will, in the next few weeks, start hiring personnel such as technicians.

“We will have people and the equipment,” he said.

The Private Electric Power Operators Association (PEPOA) recently warned of a power crisis in this city if the franchise application will be given to More Power.

The franchise to distribute electricity must not be given to a company that has no distribution system and would have to build one from scratch, it told the Lower House’s committee on legislative franchises.

It would be wiser if PECO is allowed to extend its franchise, according to PEPOA in a letter to committee chairperson Cong. Franz Alvarez./PN



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