Court turns off Peco power

By Val A. Villanueva -October 31, 2019
from Business Mirror

Iloilo City Mayor Jerry Treñas has had enough. Citing his duty to protect the people of Iloilo, he acted on the “mounting” complaints against the Panay Electric Co. (Peco), which owns the aging electric posts that were blamed for a series of fires in the city.

Treñas promptly referred these complaints about Peco’s inadequately maintained lines, power outages and hazardous electric posts to the Energy Regulatory Commission (ERC) and the Presidential Complaint Center (PCC).

Peco has been the lone power provider in the province for 95 years until Congress discontinued its franchise in favor of MORE Electric and Power Corp.

The mayor explains that the Bureau of Fire Protection of Iloilo City responded to four fire incidents involving Peco’s electric poles. He says that the poorly maintained Peco facilities are believed to have ignited the fires. Treñas believes the ERC, as a regulatory body, should act on the matter, and the PCC, as a liaison unit of government and private entities, should assist his aggrieved constituents.

The situation makes the recent announcement of Peco’s Marcelo Cacho all the more absurd: that his company would be spending P1.1 billion to improve the city’s electricity distribution system. Even if Peco were to spend P1.1 billion on the distribution system, the
company can no longer distribute electricity in Iloilo City and its nearby municipalities because Congress has awarded the distribution utility (DU) franchise to MORE, late last year.

In other words, Cacho is announcing an expansion plan for a business that no longer exists. It already lost the franchise: an authority under the Constitution that the State gives to any corporation to do a service business for the benefit of Filipino consumers.

Cacho’s announcement would have made sense had the Court of Appeals (CA) upheld Peco’s petition questioning the expropriation of its distribution assets by MORE, a company owned by multibillionaire Enrique Razon Jr. Razon is also investing close to P10 billion in developing two Iloilo ports to serve as alternative cargo handling hubs in this part of Southeast Asia, as business increases between the Philippines and our neighbors, spurred also by the trade war between China and the United States.

In a 17-page decision handed down by Associate Justice Alfredo Ampuan, the CA said it has no jurisdiction over the case filed by Peco since only the Supreme Court has jurisdiction over cases of distribution utilities as provided in Republic Act (RA) 9136, or the Electricity Power Industry Reform Act (Epira).

Ampuan said that even if the CA had jurisdiction over the case, Peco still failed to show that its business suffered from the expropriation of its distribution assets in Iloilo City because it already does not own the DU franchise since Congress gave it to MORE in a measure signed into law by President Rodrigo R. Duterte as RA 11212. Peco’s argument that MORE’s expropriation of its distribution assets will plunge Iloilo City into blackout also did not make sense since MORE, as the new franchise holder, is taking over Peco’s aged distribution assets, Justice Ampuan wrote.

“As for Peco’s fear of having Iloilo City plunge into darkness, suffice it to say that MORE is actually averting the same by pursuing its obligations as the grantee of a Legislative Franchise to operate,” Justice Ampuan pointed out.

In his decision, Justice Ampuan said that Congress granted MORE the distribution franchise in Iloilo City as part of its powers under Epira, a law that restructures the electricity industry to make it more efficient, and ensure continuous and assured supply of affordable electricity to Filipino consumers.

In a previous column, I already discussed how Congress ignored Peco’s application for the renewal of its DU franchise that expired early this year because of a cacophony of complaints from Iloilo consumers and businesses who went ballistic when the utility’s billing system exploded in a big mess prior to a Senate hearing. Consumers raged against being charged 1,000 percent higher than their previous bills.

Instead of acting on Peco’s application for the renewal of its congressional franchise, the House of Representatives and the Senate approved instead a franchise for Razon’s MORE.

RA 11212, which put into law MORE’s legislative franchise, gave Peco a temporary permit to continue its operations until MORE has completed the transition. MORE was granted the power of eminent domain to take over any Peco asset —including electric poles and other distribution resources—that would enable it to do the job assigned to it by Congress and Malacañang.

Had Marcelo Cacho made the announcement that Peco is spending P1.1 billion five years ago, he would have made sense. Now, it only comes out as a pathetic attempt to increase the value of whatever properties the company may be selling to MORE.