ERC allows Peco to power Iloilo for two more years

By Lenie Lectura - May 27, 2019

https://businessmirror.com.ph/2019/05/27/erc-allows-peco-to-power-iloilo-for-two-more-years/

PANAY Electric Co. Inc. (Peco) has been allowed by the Energy Regulatory Commission (ERC) to continue distributing electricity for up to two years.

The ERC granted Peco on May 21 a provisional Certificate of Public Convenience and Necessity (CPCN) to ensure uninterrupted supply of electricity in Iloilo City. The provisional CPCN is valid until More Electric and Power Corp. (MORE), the legislative franchisee, has established and can fully operate its own distribution system.

In an order, the regulator said Peco shall operate the distribution system until the establishment or acquisition by the grantee MORE of its own distribution system and its complete transition toward full operations, which period shall in no case exceed two years from the grant of the legislative franchise.

“I would like to underscore the provision of the law that the provisional CPCN granted to Peco during the transition period shall not be construed as extending the franchise of Peco, which has expired on January 18, 2019.  MORE, on the other hand, can exercise its right of eminent domain whereby it may acquire such private property that is actually necessary to enable it to perform its obligation to provide uninterrupted supply of electricity in Iloilo City,” ERC Chairman and CEO Agnes VST Devanadera said.

Section 17 of Republic Act 11212, entitled “An Act Granting More Electric and Power Corporation a Franchise to Establish, Operate and Maintain, for Commercial Purposes and in the Public Interest, a Distribution System for the Conveyance of Electric Power to the End Users in the City of Iloilo, Province of Iloilo, and Ensuring the Continuous and Uninterrupted Supply of Electricity in the Franchise Area,” specifically provides that Peco shall in the interim be authorized to operate the existing distribution system within the franchise area, as well as implement its existing power-supply agreements with generation companies that had been provisionally or finally approved by the ERC. 

Peco shall operate the distribution system until the establishment or acquisition by the grantee MORE of its own distribution system and its complete transition toward full operations, which period shall in no case exceed two years from the grant of the legislative franchise.

The ERC’s provisional CPCN granted to Peco is subject to the following conditions:

• The issuance of an order granting a provisional CPCN in favor of Peco covers only the interim period in order to ensure uninterrupted supply of electricity in Iloilo City;
• Peco shall settle the full amount of refund pursuant to the Commission’s Order dated November 16, 2009, in ERC Case 2001-333 (96-26), not later than June 30, 2019. Peco shall submit a report within five days from June 30, 2019; and
• The provisional CPCN in favor of Peco shall be automatically revoked and shall cease to have any force and effect, subject to the provision of Section 10 of RA 11212.