ILOILO City – In danger of failing to secure a franchise extension, Panay Electric Company (PECO) got a shot in the arm from an independent study on its distribution network.
PECO’s network performance “improved significantly” since 2010, according to a study conducted by Singapore-based engineering and professional services consultancy firm WSP.
Conducted in April this year, the study was commissioned by the non-profit, private sector-led organization Iloilo Economic Development Foundation, Inc. (ILED).
But while the study found PECO’s network performance to have improved, it noted that the service the company provides to its franchisees “lags behind” what distribution utilities in key Philippine cities – such as Metro Manila, Cebu Davao – provide.
“The gap widens even more when comparison is made with distribution utilities in the Asean region,” according to the study.
PECO has been under fire since last year for, among others, erroneous billings and poor customer service.
ILED executive director Francis Gentoral said the study was an “independent, objective and global view” of PECO’s network performance and the quality of its asset and system platform.
“The study is further intended to provide key inputs to the ongoing legislative deliberation on the renewal of the PECO franchise,” said Gentoral.
PECO’s franchise is expiring in 2019. It seeks to renew it for 25 more years.
At the onset of the 2018 study, ILED chair Narzalina Lim said the results would be made public and submitted to the House of Representatives’ committee on legislative franchises.
Lim said WSP was asked to come up with an independent evaluation of PECO’s system configuration for a more efficient design; determine strategic investments based on important recommendations; and explore industry updates for competitive distribution services.
According to Lim, the results of the new study may help the House committee on legislative franchises in making a decision on PECO’s application for franchise renewal.
“We don’t take sides. Whatever the outcome of the study, we will share it,” said Lim.
The 2018 study did not cover the customer service aspects of PECO. ILED said this was outside the study’s Terms of Reference.
This was not the first time WSP assessed PECO. In 2010 when then known as Parsons Brinckerhoff (before becoming a wholly owned independent subsidiary of WSP Global in 2014), it was also tapped by ILED to study PECO’s operation and services and came up with recommendations.
These recommendations included the following:
* reconfiguration of PECO’s distribution network (to open ring configuration with strategically located switches for smooth load transfers between feeders)
* installation of recloser or circuit-breakers with reclosing capabilities in all existing distribution feeders from the primary substation
* adherence to vegetation clearance standards
According to the 2018 study, the recommendations in its 2010 study were implemented “but not in full.”
PECO welcomed the study’s findings. It would further help it improve its reliability, it stressed in a statement.
It acknowledged that certain recommendations of the 2010 study were yet to be implemented; it said the implementation is being done by phases.
Recently, the Lower House’s committee on legislative franchises approved the application of More Minerals Corp. (MMC) to take over power distribution in Iloilo City. On the other hand, it still has to act on the application for franchise extension of PECO.
In a statement, PECO made it clear it wanted to further serve the Ilonggos. It applied for a 25-year extension of its franchise.
PECO’s information technology and administration officer Marcelo Cacho also dismissed the report about MMC’s planned acquisition of the local power distribution utility.
“We are not in talks with them or anything…The company’s goal is to fight,” Cacho told Panay News.
Among others, PECO questioned the apparent haste in the processing of MMC’s franchise.
MMC is backed by Spanish-Filipino billionaire Enrique Razon and businessman Walter Brown of Monte Oro Resources & Energy Inc.
PECO also questioned MMC’s “expertise and capability to run an electric distribution business since it is a mining firm as stated in its articles of incorporation.”
“Even their partner, the Walter Brown group through shareholder Apex Mining Co Inc., is a power generation company which is a totally different business from power distribution,” added PECO.
It also doubted if MMC has the needed manpower to operate and maintain the distribution and conveyance of electric power.
On their part, according to PECO, it had proven its capability to run a power distribution business. It is in the “top 15 percent” of the 146 electric distribution utilities in the country for “positive reliability performance.”
“This can be seen in the System Average Interruption Frequency Index (SAIFI) figures versus a company like MMC which has no track record in the industry,” PECO added./PN
