ILOILO City – Panay Electric Co.’s (PECO) Certificate of Public Convenience and Necessity (CPCN) expires today. But it has secured another one so it will continue to distribute power in this city albeit temporarily.
The Energy Regulatory Commission (ERC) granted PECO a provisional authority to operate because the new power franchisee in the city, More Electric and Power Corp. (MORE Power), still has no distribution system of its own.
ERC chairperson Agnes Devanadera, however, stressed that its issuance of a CPCN must not be construed as extending the franchise of PECO.
PECO’s franchise expired on Jan. 18, 2019 and the city’s longest-serving power distributor (over nine decades) failed to get a new or extended franchise from Congress.
According to ERC, a CPCN was issued to PECO “to ensure uninterrupted supply of electricity in Iloilo City.” Its decision was contained in an order dated May 21, 2019.
“Under the law, we (the ERC) are authorized to grant PECO the necessary provisional CPCN during the interim period or until More Electric and Power Corp., the legislative franchisee, has established and can fully operate its own distribution system,” stressed Devanadera.
ERC cited Section 17 of Republic Act 11212 (the franchise law of MORE Power) that specifically states PECO shall, in the interim, be authorized to operate the existing distribution system within the franchise area (Iloilo City), as well as implement its existing power supply agreements with generation companies that had been provisionally or finally approved by ERC.
It added that PECO shall operate the power distribution system until the establishment or acquisition by MORE Power of its own distribution system and its complete transition towards full operations, which period shall in no case exceed two years from the grant of the legislative franchise.
ERC’s provisional CPCN to PECO is subject to the following conditions:
* it covers only the interim period
* PECO shall settle the full amount of refund that Iloilo City consumers are entitled pursuant to the Commission’s Order dated Nov. 16, 2009 in ERC Case No. 2001-333 (96-26), not later than June 30, 2019. PECO shall submit a report within five days from June 30, 2019.
* the CPCN shall be automatically be revoked and shall cease to have any force and effect once MORE Power has established or acquired a distribution system
Reached for his comment, MORE Power president Roel Castro said it was just proper for ERC to grant PECO a provisional authority to operate.
“Because if hindi nila binigyan ng provisional authority, wala license to operate. Who will provide the electricity to consumers,” said Castro.
Just this May 18, the Department of Energy said it would take over the power distribution system in this city if necessary.
But Undersecretary Felix William Fuentebella said this would only be the “last resort” should MORE Power and PECO fail to agree on a smooth transition.
“Makikialam ang gobyerno under the Constitution,” Fuentebella said.
In March this year, MORE Power asked the Regional Trial Court here to issue a writ of possession authorizing it to take immediate control, operation, use, and disposition of PECO’s power distribution system assets.
It also petitioned the court to determine the reasonable value of PECO’s power distribution system assets for just compensation, then order the transfer of the ownership of these upon payment of a just compensation.
But on May 23, the court granted PECO’s motion to suspend the hearing of the expropriation case.
PECO cited the petition it filed at Mandaluyong City’s Regional Trial Court Branch 209 questioning the constitutionality of MORE Power’s franchise law.
PECO administrative manager Marcelo Cacho said they must wait for the Mandaluyong Court’s ruling “because this is a precedent-setting case that will have repercussions in the entire power industry.”
PECO has vowed to exhaust all legal remedies to protect its power distribution assets from MORE Power./PN
