LET OUR readers be reminded that on Oct. 10 this year, this corner revealed a telephone conversation I had with Mayor Jerry Treñas. I asked him whether he was willing to mediate between officials of the two power firms embroiled in a dispute over the law (Republic Act 11212) – signed into law by President Duterte on Feb. 14, 2019 – that granted MORE Electric and Power Corp. (MORE Power) the new power distribution franchise in Iloilo City for the next 25 years.
Panay Electric Co. (PECO) would not budge despite the expiration of its franchise, alleging that the law is “unconstitutional”.
“Let the Court decide first,” the mayor replied, adding that he would intervene only after the Court would have issued a writ of possession authorizing MORE Power to seize the power-distribution facilities of PECO.
But now, with the findings of the Energy Regulatory Commission (ERC) and Bureau of Fire Protection (BFP) linking a series of city fires to worn-out transformers, rotting wooden poles and faulty electrical wirings, the mayor sees no further reason to stretch his patience.
More so with the report of Norman Tabud, head of the Iloilo City Business Permits and Licensing Office, confirming that PECO has not renewed its business permit this year and has not paid the city government P98 million in realty taxes in the past three years.
With its 64,000 business and residential clients paying them millions of pesos daily, how could PECO have missed paying peanuts?
So now the mayor has found a reason to schedule for public auction P98-million worth of PECO’s functional equipment.
Certainly, the Cacho family and the other shareholders would not welcome that humiliating process.
I have searched the social media, specifically Facebook, for whatever reaction and found a good one from a retired senior assistant vice president of the Philippine National Bank, Leopoldo “Doods” Moragas.
“PECO will pay it,” he wrote, referring to the P90-M tax debt. “No one will give away a multi-million-peso business without putting up a fight.”
A rumor now spreading like wildfire is that the company is in the red because of a wrong investment that has disabled it from refunding the bill deposits of power consumers on demand.
As specified in Article 7 of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA), “a customer who has paid his electric bills on or before its due date for three consecutive years may demand for the full refund of the deposit even prior to the termination of his service.“
The resignation of Randy Pastolero as PECO’s vice president for operations and general manager could have been caused by stress, if not shame, over the company’s inability to refund bill deposits on demand.
Moragas believes that PECO would eventually ask for more than the P482 million offered by MORE Power as “just compensation” in the event it loses its Court case questioning the constitutionality of two sections of Article 11212.
Section 10 says that MORE Power as franchise grantee “may acquire such private property as is actually necessary for the realization of the purposes for which this franchise is granted.”
Section 17, the transition mechanism, provides that PECO may still operate the existing distribution system within the franchise area “until the establishment or acquisition by the grantee of its own distribution system.”
MORE Power insists that acquisition also refers to expropriation of the power-distribution system.
Methinks that is mutually beneficial. Otherwise, with no more franchise but a temporary certificate of public convenience from the ERC, PECO would be left with nothing but junk. (hvego31@gmail.com/PN)
