DOE ‘ambivalent’ over Panay Electric takeover plan

Published January 17, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/01/17/doe-ambivalent-over-panay-electric-takeover-plan/

Iloilo consumers are on the edge of suffering power interruptions starting this January 19 due to the non-renewal of franchise of their servicing power utility – yet until this point, the government is “inconclusive” on planned takeover of Panay Electric Company.

Last weekend, Energy Secretary Alfonso G. Cusi sounded off that “a takeover may not be necessary,” but as the deadline draws nearer, the Department of Energy (DOE) seems to be changing its mind.

The energy chief is now indicating that the government is ready to take over; and plans are being sorted out with the Energy Regulatory Commission. The energy department can just guarantee for now that Iloilo consumers will not suffer brownouts when the utility firm’s 25-year franchise expires this weekend.

“The DOE will see to it that there will be no disruption in service,” Cusi said, further emphasizing that “I don’t think there will be necessity of government takeover.”

The energy chief noted that when the new franchise of MORE Electric and Power Company will already be signed by President Rodrigo Duterte, “we’ll ensure proper turnover and transition.”

The MORE franchise that was approved in Congress last year is still pending at the President’s office – either for his final approval or veto.

The DOE’s commitment of non-power interruption has likewise been previously seconded by industry regulator ERC.

The assurances of the two key governing agencies in the power sector will somehow allay the fears of Iloilo consumers on threats of operational shutdown of the beleaguered utility firm due to non-renewal of its franchise.

PECO lost bid on the extension of its franchise due to array of issues thrown its way – and had been transferred to MORE Electric and Power Company of tycoon Enrique Razon Jr.
Razon’s group, it was noted, will provide the Iloilo power utility firm with a new capitalization of P2.0 billion upon MORE’s takeover of PECO.

Both the House of Representatives and Senate had awarded the new franchise to MORE, for it to be the new duly operator of the Iloilo distribution utility.

The franchise bill of PECO just got stalled in Congress, as its renewal hit roadblocks due to the opposition by city council officials as well as groups of Iloilo residents.

An earlier statement to the media has noted that “the protest against PECO’s new franchise is backed up by a petition signed by 25,000 Ioilo city residents and a concurrent Iloilo City Council resolution,” in which they rapped the utility firm of “overpricing issues” as well as ineffective services and lack of modernization in facilities.

One of the allegations hurled against PECO had been the P631-million refund due to its customers, although the utility firm indicated that the balance of that just amounted to P34 million and payback is targeted for completion early part of this year.