Grant of franchise decried

November 04, 2018

THE Private Electric Power Operators Association (PEPOA) described as “shocking” the alleged hasty approval of the franchise given by Congress to an erstwhile mining company to operate as a power distributor in Iloilo City and nearby areas.

“We are shocked to learn of the hasty approval of the franchise application of More Minerals Corp. (MMC) -- renamed MORE Electric and Power Corp. (MORE Power) -- to the detriment of the incumbent distribution utility of PECO (Panay Electric Company)” PEPOA said in a letter to Palawan Rep. Franz Alvarez, chair of the House committee on legislative franchise.

More Power was previously MORE Minerals Corp., a subsidiary of Monte Oro Resources and Energy, Inc. (MORE).

“This development is deeply concerning to us as it puts a highly urbanized city like Iloilo at risk,” the letter stated.

PEPOA president, Atty. Ranulfo Ocampo, said MMC is primarily a mining company, hence, does not have the technical capability to operate and maintain a power distribution utility.

“Even if MMC were to change its primary purpose into power distribution, no company can get the required experience and qualifications in just a few days,” he said.

According to Ocampo, MORE Power does not have the track record or the experience in running an electric distribution utility.

PECO chairman of the board Mariano M. Cacho, Jr. noted that MORE Power lacked experience and equipment to operate an electric power distribution business.

He said the firm has relied on the grant of the power of eminent domain to “expropriate and confiscate the assets and business of the current franchisee,” which is PECO.

On the other hand, PECO has been in the business for 95 years now and belongs to the top performers in the country, as public records show that its System Average Interruption Frequency Index (SAIFI) was among the top in the country.

PEPOA also noted that PECO is in the top 15 percent, in terms of positive reliability performance, compared to the other 146 electric distribution utilities in the country, further adding that the alleged “mounting” consumer complaints against PECO for erroneous billings are not supported by facts.

Citing the records from the Energy Regulatory Commission, (ERC), it was pointed out that the complaints comprised a negligible “0.01 percent” of PECO’s more than 60,000 customers.

‘This is not something new to the industry and is certainly not sufficient basis for withholding the franchise renewal of PECO,” Ocampo said.

While deciding to “sit” on the application for franchise renewal by PECO, Congress last October 8, forwarded the approved franchise of MORE Power the next day to the Senate.

After holding just two hearings, the Senate panel, headed by Sen. Grace Poe announced they had also approved the 25-year franchise application “in principle” last October 22.

“With that, we will form the technical working group but we’ve already approved in principle the motion for a franchise for MORE,” Senator Grace S. Poe-Llamanzares was quoted as saying.

A source at the Senate said Poe’s committee is just finalizing the “fine prints” of the bill at the Technical Working Group (TWG) that is also expected to shut down the door to PECO, after supplying the electricity needs of Iloilo City and three other towns for the last 95 years.

Aside from brushing aside PECO’s application for renewal, the company, whose franchise is to expire by January 2019, is also mandated to handover all its distribution assets, on a “silver platter,” to the new company.

PECO is to operate temporarily to avoid power disruption in its franchise area.