PECO blamed

August 24, 2020

ILOILO City’s prime business group says one factor that turned investors away from setting up business in the city in the past had been the failure of the city’s old utility firm Panay Electric Co. (PECO) to develop a world-class power distribution system that could reduce electricity rates to lower business’ operating costs.

Iloilo Economic Development Foundation (ILEDF), which is the lead business grouping in the city, noted that improvements made by PECO in the city’s distribution system were not enough to meet world-class standards that could have made its rates more competitive and acceptable to new businesses.

“Though PECO initiated some improvements, still they were not enough, not at par with the standards and requirements set to attract investments,” ILEDF Executive Director Francis Gentoral said.

The ILDF, in a position paper borne out of a 2008 study by Singaporean consulting firm WPS  of the improvements needed in the city’s power distribution system, had declared that Iloilo City needed utility firm with “a demonstrated capability, track record, and financial capability to operate and maintain a distribution utility for a fast-growing metropolis; make significant investments in infrastructure; systems and technology; and human resources; and maintain a long-term commitment to Iloilo.”

Gentoral said these are qualities that would provide Iloilo City with a world-class power distribution system that would assure investors of a stable, continuous and cost-effective electricity supply.

He said the entry of the new power utility More Electric and Power Corp. (MORE Power)  provided Iloilo City to get over the failures of PECO to fulfill its commitment for a world-class system, and thus puts the burden on the new company to ensure it modernizes the city’s power distribution system to achieve world-class standards.

Gentoral urged the city’s residents to support MORE Power’s announced plans to invest P1.8 billion in new systems and equipment that could remove the inefficiencies such as systems losses arising from pilferage and technical waste of electricity due to the ageing equipment and distribution lines left by PECO to MORE Power.

In a technical study of the entire distribution network when MORE Power took over in March this year, engineering expert firm MIESCOR Corp. found the possible existence of at least 30,000 illegal power connections that results in Iloilo City suffering systems losses of as high as 9.3%, or way above standards set by the government.

The systems losses are absorbed by the city’s residents and businesses and paid through their monthly bills, one of the highest in the country for years aside from regular complaints of inefficient billing imposed on customers of PECO. 

Gentoral said the efforts of MORE Power to address this problem is welcomed by Ilonggos, who were gladdened by MORE Power’s immediate lowering of power rates to below P9 per kilowatt hour, the first time that the city’s power rates fell below P10 per kwh for two decades. 

He said the city’s business sector is hoping the Supreme Court would not hinder the city’s progress by rendering a decision that could impact on the future of a modern, world-class power distribution system for the entire Iloilo region.

He said ILDF is confident that PECO will eventually accept its loss of the distribution system business for the benefit of Ionggos.